1. FIFO and LIFO, Income Statement Presentation The board of directors of Oksana Corporation is considering whether or not it should instruct the accounting department to change from a first-in, first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available.
Sales 20,000 units @ $50
Inventory, January 1 6,000 units @ 20
Purchases 6,000 units @ 22
10,000 units @ 25
7,000 units @ 30
Inventory, December 31 9,000 units @
Operating expenses $200,000
Prepare a condensed income statement for the year on both bases for comparative purposes.