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Question: Exercise 22-5 Presented below are income statements prepared on a LIFO and FIFO basis for Wildhor…
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Exercise 22-5

Presented below are income statements prepared on a LIFO and FIFO
basis for Wildhorse Company, which started operations on January 1,
2016. The company presently uses the LIFO method of pricing its
inventory and has decided to switch to the FIFO method in 2017. The
FIFO income statement is computed in accordance with the
requirements of GAAP. Wildhorse’s profit-sharing agreement with its
employees indicates that the company will pay employees 10% of
income before profit-sharing. Income taxes are ignored.

LIFO Basis

FIFO Basis

2017

2016

2017

2016

Sales $3,050 $3,050 $3,050 $3,050
Cost of goods sold 1,080 1,040 1,140 930
Operating expenses 1,040 1,040 1,040 1,040
Income before profit-sharing 930 970 870 1,080
Profit-sharing expense 93 97 98 97
Net income $837 $873 $772 $983

Answer the following questions.

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

If comparative income statements are prepared, what net income
should Wildhorse report in 2016 and 2017? (Round
answers to 0 decimal places, e.g. 125.)

2017

2016

Net income $

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

$

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Assume that Wildhorse has a beginning balance of retained
earnings at January 1, 2017, of $980 using the LIFO method. The
company declared and paid dividends of $480 in 2017. Prepare the
retained earnings statement for 2017, assuming that Wildhorse has
switched to the FIFO method. (Round answers to 0
decimal places, e.g. 125.)

WILDHORSE COMPANY
Retained Earnings Statement

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
Cumulative Effect of Change to FIFODividendsNet IncomeRetained
Earnings, January 1, as adjustedRetained Earnings, January 1, as
reportedRetained Earnings, December 31

$

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
Cumulative Effect of Change to FIFODividendsNet IncomeRetained
Earnings, January 1, as adjustedRetained Earnings, January 1, as
reportedRetained Earnings, December 31

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
Cumulative Effect of Change to FIFODividendsNet IncomeRetained
Earnings, January 1, as adjustedRetained Earnings, January 1, as
reportedRetained Earnings, December 31

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
AddLess

:

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
Cumulative Effect of Change to FIFODividendsNet IncomeRetained
Earnings, January 1, as adjustedRetained Earnings, January 1, as
reportedRetained Earnings, December 31

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
AddLess

:

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
Cumulative Effect of Change to FIFODividendsNet IncomeRetained
Earnings, January 1, as adjustedRetained Earnings, January 1, as
reportedRetained Earnings, December 31

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...
Cumulative Effect of Change to FIFODividendsNet IncomeRetained
Earnings, January 1, as adjustedRetained Earnings, January 1, as
reportedRetained Earnings, December 31

$

Question: Exercise 22-5Presented below are income statements prepared on a LIFO and FIFObasis for Wildhor...

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