Question

Pinkie Print​ Supplies, Inc., sells laser printers and supplies. Assume Pinkie started the year with 100 containers of ink​ (average cost of $ 9.10 ​each, FIFO cost of $ 8.60 ​each, LIFO cost of $ 8.00 ​each). During the​ year, the company purchased 800 containers of ink at $ 10.00 and sold 600 units for $ 21.75 each. Pinkie paid operating expenses throughout the​ year, a total of $ 5 comma 000. Ignore income taxes for this exercise. Prepare Pinkie​'s income statement for the current year ended December 31 using the​ average-cost, 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 amounts for each of the three required inventory methods.​ (Calculate unit costs to the nearest cent. Round all other calculations to the nearest whole​ dollar.)

Answer 1

Instructios are listed below

Step-by-step explanation:

Giving the following information:

Assume Pinkie started the year with 100 containers of ink​ (average cost of $ 9.10 ​each, FIFO cost of $ 8.60 ​each, LIFO cost of $ 8.00 ​each).

During the​ year, the company purchased 800 containers of ink at $10.00 and sold 600 units for $21.75 each. Pinkie paid operating expenses throughout the​ year, a total of $ 5,000.

FIFO:

Sales= 600*21.75= 13,050

COGS= (100*8.60 + 500*10)= 5860

Gross profit= 7190

Operating expense= 5000

Net operating profit= $2,190

LIFO:

Sales= 13,050

COGS= (600*10)= 6000

Gross profit= 7,050

Operating expense= 5000

Net operating profit= $2,050

Average-cost

Sales= 13,050

COGS= [(9.10+10)/2]*600= 5730

Gross profit= 7,320

Operating expense= 5000

Net operating profit= $2,320