Reference no: EM132318406

Question

Presented below are income statements prepared on a LIFO and FIFO basis for Sheffield 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.

Sheffield'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                                           $3,070          $3,070            $3,070          $3,070

Cost of goods sold                         1,090            990                1,090            970

Operating expenses                        970              970                970               970

Income before profit-sharing            1,010            1,110             1,010            1,130

Profit-sharing expense                    101               111               103               111

Net income                                   $909             $999              $907             $1,019

Answer the following questions.

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