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Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910 Exercise 30
Cambi Company began operations on January 1, 2010.In the second quarter of 2011, it adopted the FIFO method of inventory valuation.In the past, it used the LIFO method.The company's interim income statements as originally reported under the LIFO method follow: 
If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows:
Sales for the second quarter of 2011 are $20,000, cost of goods sold under the FIFO method is $9,000, and operating expenses are $3,400.The effective tax rate remains 40 percent.Cambi Company has 1,000 shares of common stock outstanding.
Prepare a schedule showing the calculation of net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2011.
If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows:
Sales for the second quarter of 2011 are $20,000, cost of goods sold under the FIFO method is $9,000, and operating expenses are $3,400.The effective tax rate remains 40 percent.Cambi Company has 1,000 shares of common stock outstanding.
Prepare a schedule showing the calculation of net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2011.
Explanation
Verified
Verified
FIFO:
It is exact opposite of LIFO wher...
Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
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