Question

During 2017, Sheffield Company changed from FIFO to weighted-average inventory pricing. Pretax income in 2016 and 2015 (Sheffield’s first year of operations) under FIFO was $162,140 and $181,860, respectively. Pretax income using weighted-average pricing in the prior years would have been $153,100 in 2016 and $174,200 in 2015. In 2017, Sheffield reported pretax income (using weighted-average pricing) of $205,200. Show comparative income statements for Sheffield, beginning with "Income before income tax," as presented on the 2017 income statement. (The tax rate in all years is 25%.)

Answer 1

Net Income for 2017,2016 & 2015 are $153,900, $114,825 and $130,650 respectively.

Step-by-step explanation:

2017 2016 2015

Income before income taxes $205,200 $153,100 $174,200

Less: Income taxes at 25% ($51,300) ($38,275) ($43,550)

Net Income $153,900 $114,825 $130,650