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Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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 Accounts Cost of goods sold (LIFO) Operating expenses Income taxes (25%) 1st Quarter $ 21,000 2nd Quarter $ 23,000 5,100 3,100 Income before income taxes Net income $ 12,800 3,200 $ 9,600 $ 13,600 3,400 $ 10,200 $ 10,800 6,100 3,300 $ 14,400 3,600 8,100 4,100 $ 14,800 3,700 $ 15,100 3,775 $ 11,325 2023 3rd Quarter 4th Quarter 2024 1st Quarter $ 25,000 6,900 3,700 $ 27,000 $ 29,000 9,600 4,300 $ 11,100 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: Accounts Cost of goods sold (FIFO) 2023 2024 $ 8,500 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 4,900 $ 5,700 $ 6,300 $ 7,100 Sales for the second quarter of 2024 are $31,000, cost of goods sold under the FIFO method is $10,100, and operating expenses are $4,500. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Required: Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. Three Months Ended June Six Months Ended June Net income Earnings per share 30 2023 2024 $ 12.30 30 2023 2024

Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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 Accounts Cost of goods sold (LIFO) Operating expenses Income taxes (25%) 1st Quarter $ 21,000 2nd Quarter $ 23,000 5,100 3,100 Income before income taxes Net income $ 12,800 3,200 $ 9,600 $ 13,600 3,400 $ 10,200 $ 10,800 6,100 3,300 $ 14,400 3,600 8,100 4,100 $ 14,800 3,700 $ 15,100 3,775 $ 11,325 2023 3rd Quarter 4th Quarter 2024 1st Quarter $ 25,000 6,900 3,700 $ 27,000 $ 29,000 9,600 4,300 $ 11,100 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: Accounts Cost of goods sold (FIFO) 2023 2024 $ 8,500 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 4,900 $ 5,700 $ 6,300 $ 7,100 Sales for the second quarter of 2024 are $31,000, cost of goods sold under the FIFO method is $10,100, and operating expenses are $4,500. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Required: Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. Three Months Ended June Six Months Ended June Net income Earnings per share 30 2023 2024 $ 12.30 30 2023 2024

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 5E: Fava Company began operations in 2018 and used the LIFO inventory method for both financial...
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Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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 Accounts Cost of goods sold (LIFO) Operating expenses Income taxes (25%) 1st Quarter $ 21,000 2nd Quarter $ 23,000 5,100 3,100 Income before income taxes Net income $ 12,800 3,200 $ 9,600 $ 13,600 3,400 $ 10,200 $ 10,800 6,100 3,300 $ 14,400 3,600 8,100 4,100 $ 14,800 3,700 $ 15,100 3,775 $ 11,325 2023 3rd Quarter 4th Quarter 2024 1st Quarter $ 25,000 6,900 3,700 $ 27,000 $ 29,000 9,600 4,300 $ 11,100 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: Accounts Cost of goods sold (FIFO) 2023 2024 $ 8,500 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 4,900 $ 5,700 $ 6,300 $ 7,100 Sales for the second quarter of 2024 are $31,000, cost of goods sold under the FIFO method is $10,100, and operating expenses are $4,500. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Required: Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. Three Months Ended June Six Months Ended June Net income Earnings per share 30 2023 2024 $ 12.30 30 2023 2024
Transcribed Image Text:Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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 Accounts Cost of goods sold (LIFO) Operating expenses Income taxes (25%) 1st Quarter $ 21,000 2nd Quarter $ 23,000 5,100 3,100 Income before income taxes Net income $ 12,800 3,200 $ 9,600 $ 13,600 3,400 $ 10,200 $ 10,800 6,100 3,300 $ 14,400 3,600 8,100 4,100 $ 14,800 3,700 $ 15,100 3,775 $ 11,325 2023 3rd Quarter 4th Quarter 2024 1st Quarter $ 25,000 6,900 3,700 $ 27,000 $ 29,000 9,600 4,300 $ 11,100 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: Accounts Cost of goods sold (FIFO) 2023 2024 $ 8,500 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 4,900 $ 5,700 $ 6,300 $ 7,100 Sales for the second quarter of 2024 are $31,000, cost of goods sold under the FIFO method is $10,100, and operating expenses are $4,500. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Required: Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. Three Months Ended June Six Months Ended June Net income Earnings per share 30 2023 2024 $ 12.30 30 2023 2024
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