P-16-05 Name:

Section:

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1. Effect of Alternative Accounting Methods

Furlong Corporation
Alternative Income Statements
For the Year Ended December 31, 2014
Income Statement Using FIFO
and Straight-Line Methods
Net sales
Cost of goods sold:
Goods available for sale
Less ending inventory
units at
units at
Cost of goods sold
Gross margin
Operating expenses:
Salaries expense
Other expenses
Depreciation
Years
Total operating expenses
Net income

Income Statement Using LIFO

and Double-Declining-Balance Methods
Net sales
Cost of goods sold:
Goods available for sale
Less ending inventory
units at
units at
Cost of goods sold
Gross margin
Operating expenses:
Salaries expense
Other expenses
Depreciation

Total operating expenses

Net income
2.
Furlong Corporation
Schedule of Differences in Net Income
For the Year Ended December 31, 2014
Difference in net income:
Net income using FIFO and straight-line methods
Net income using LIFO and double-declining-
balance methods
Difference in net income
Differences resulting from alternative methods:
Cost of goods sold:
FIFO
LIFO
Depreciation:
Straight-line method
Double-declining-balance method
Difference in net income

3.

Inventory Turnover
Cost of Goods Sold Ending Inventory
FIFO Method: = times
LIFO Method: = times

4.

Return on Assets
Net Income Total Assets
FIFO/Straight-Line Methods =
LIFO/Double-Decl.-Balance =