50.1K

Verified Solution

Link Copied!

During the third quarter of its 20X7 fiscal year, Press Company is considering the different methods of reporting accounting changes on its interim segments. Preliminary data are available for the third quarter of 20X7, ending on September 30, 20X7, prior to any adjustments required for any accounting changes. The company's tax rate is 40 percent of income. Selected interim data for the company, in thousands of dollars, follow: Earnings from Operations, Before Tax Net Gross Net Quarter Ended 20X7: Sales $390 428 396 403 Profit Earnings March 31 June 30 September 30 (preliminary) $ 22 $13.2 $123 125 141 31 18.6 19.8 20X6: March 31 June 30 September 30 December 31 129 141 138 124. 13.2 19.8 19.2 19.2 32 32 385 Required For the following independent cases, present the company's interim financial data for the three quarters of 20X7 and the comparative data for 20x6, assuming that in a meeting on the last day of the third quarter of 20X7, the company decides to make the specified accounting change a. The company decides to change from the FIFO method of accounting for inventory to the LIFO method. The accounting department has prepared the following schedule of data, in thousands of dollars, showing the cost of goods sold each quarter under the LIFCO method. The preceding selected interim data are based on the FIFO method. The accounting department has determined that there will be no difference in cost of goods sold prior to January 1, 20X6. (Enter your answers in thousands of dollars. Round your Net Earnings to 1 decimal place.)

Answer & Explanation Solved by verified expert

See Answer