Exercise- The following comparative information is available for Larkspur, Inc. for 2017.
| |
LIFO |
FIFO |
| Sales revenue |
$90,640 |
$90,640 |
|
| Cost of goods sold |
39,610 |
26,970 |
|
| Operating expenses (including depreciation) |
24,850 |
24,850 |
|
| Depreciation |
9,620 |
9,620 |
|
| Cash paid for inventory purchases |
31,500 |
31,500 |
|
Determine net income under each approach. Assume a 30% tax rate.
Determine net cash provided by operating activities under each approach. Assume that all sales were on a cash basis and that income taxes and operating expenses, other than depreciation, were on a cash basis.
Calculate the quality of earnings ratio under each approach. (Round answers to 2 decimal places, e.g. 5.15.)