S62 similar to Question Help Wilson Copy Center sells laser

S6-2 (similar to Question Help Wilson Copy Center sells laser printers and supplies. Assume Wilson Copy Center started the year with 100 containers of ink (average cost of S9.10 each, FIFO cost of S8.60 each, LIFO cost of S8.00 eachi. During the year, Wilson Copy Center purchased 800 containers of ink at $10.00 and sold 600 units for $21.75 each. Wilson Copy Center paid operating expenses throughout the year, a total of S3,900. Ignore income taxes for this exercise. Prepare Wilson Copy Centers income statement for the current year ended December 31 under the average, FIFO, and LIFO inventory costing methods. Include a complete statement heading Complete the income statement by selecting the appropriate heading and income statement labels, and then calculating the amcunts for each of the three required inventory methods (Calculate unit costs to the nearest cent. Round all other calculations to the nearest whole dollar)

Solution

Answer:

Income statement for the year ended decmber-31

Wilson copy Center

Income statement

Method

Particular

Average

FIFO

LIFO

Sales Revenue
=600*21.75

13050

13050

13050

less:

Cost of goods sold

as per weighted average

5940

as per FIFO

5860

as per LIFO

6000

Gross profit

7110

7190

7050

less:

Operating expanses

3900

3900

3900

Net income

3210

3290

3150

Working notes for the above answer:

1

Calculation of cost of goods sold as per Average

Weighted average

Unit

price

total

Opening

100

9.1

910

Purchased

800

10

8000

Total

900

9.9

8910

Less: Sales

Total sales

600

9.9

5940

Closing stock

300

9.9

2970

2

Calculation of cost of goods sold as per FIFO

FIFO

Unit

price

total

Opening

100

8.6

860

Purchased

800

10

8000

Total

900

8860

Less: Sales

From opening inventory

100

8.6

860

From purchases inventory

500

10

5000

Total sales

600

5860

Closing stock

300

3000

3

Calculation of cost of goods sold as per LIFO

LIFO

Unit

price

total

Opening

100

8

800

Purchased

800

10

8000

Total

900

8800

Less: Sales

From opening inventory

0

0

From purchases inventory

600

10

6000

Total sales

600

6000

Closing stock

300

2800

Wilson copy Center
Income statement
	Method
Particular	Average	FIFO	LIFO
Sales Revenue =600*21.75	13050	13050	13050
less:
Cost of goods sold
as per weighted average	5940
as per FIFO		5860
as per LIFO			6000
Gross profit	7110	7190	7050
less:
Operating expanses	3900	3900	3900
Net income	3210	3290	3150