Cambi Company began operations on January 1, 2014. In the second


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Cambi Company began operations on January 1, 2014. In the second quarter of 2015, 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: 2014 2015 1st Q 2nd Q 3rd Q 4th Q 1st Q Sales $ 33,000 $ 35,000 $ 37,000 $ 39,000 $ 41,000 Cost of goods sold (LIFO) 6,300 7,300 8,100 9,300 10,800 Operating expenses 4,300 4,500 4,900 5,300 5,500 Income before income taxes $ 22,400 $ 23,200 $ 24,000 $ 24,400 $ 24,700 Income taxes (40%) 8,960 9,280 9,600 9,760 9,880 Net income $ 13,440 $ 13,920 $ 14,400 $ 14,640 $ 14,820 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: 2014 2015 1st Q 2nd Q 3rd Q 4th Q 1st Q Cost of goods sold (FIFO) $ 6,100 $ 6,900 $ 7,500 $ 8,300 $ 9,700 Sales for the second quarter of 2015 are $43,000, cost of goods sold under the FIFO method is $11,300, and operating expenses are $5,700. The effective tax rate remains 40 percent. Cambi Company has 1,000 shares of common stock outstanding. Calculate the net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2015. (Round “Earnings per share” answers to 2 decimal places.) Three Months Ended June 30 Six Months Ended June 30 2014 2015 2014 2015 Net income Earnings per share ATTACHMENT PREVIEW Download attachment Chapter 08 Homework Assignments.pdf Cambi Company began operations on January 1, 2014. In the second quarter of 2015, 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: Sales Cost of goods sold (LIFO) Operating expenses 1st Q $ 33,000 6,300 4,300 2014 2nd Q 3rd Q $ 35,000 $ 37,000 7,300 8,100 4,500 4,900 4th Q $ 39,000 9,300 5,300 2015 1st Q $ 41,000 10,800 5,500 Income before income taxes Income taxes (40%) $ 22,400 8,960 $ 23,200 9,280 $ 24,000 9,600 $ 24,400 9,760 $ 24,700 9,880 $ 13,440 $ 13,920 $ 14,400 $ 14,640 $ 14,820 Net income 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: 2014 1st Q $ 6,100 Cost of goods sold (FIFO) 2nd Q $ 6,900 3rd Q $ 7,500 4th Q $ 8,300 2015 1st Q $ 9,700 Sales for the second quarter of 2015 are $43,000, cost of goods sold under the FIFO method is $11,300, and operating expenses are $5,700. The effective tax rate remains 40 percent. Cambi Company has 1,000 shares of common stock outstanding. Calculate the net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2015. (Round "Earnings per share" answers to 2 decimal places.) Three Months Ended June 30 2014 Net income Earnings per share 2015 Six Months Ended June 30 2014 2015 Read more TFTII
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