Inventories Purchases and Sales
Beginning (15,000 units) Total net sales (215,000 units) $870,100
Ending (30,000 units) Total cost of goods purchased $619,000
(230,000 units)

Purchases were made quarterly as follows.

Quarter Units Unit Cost Total Cost
1 60,000 $2.97 $178,200
2 50,000 $3.07 153,500
3 50,000 $3.17 158,500
4 70,000 $3.37 235,900
230,000 726,100

Operating expenses were $157,310, and the company's income tax rate is 34%


Condensed Income Statement
For Year Ended December 31, 2010

FIFO LIFO
Sales 870,100 870,100
Cost of goods sold
Beginning Inventory 37,900 37,900
Cost of goods purchased 619,800 619,800
Cost of goods available for sale 286,450 222,750
Ending Inventory 185,350 133,650
Cost of goods sold ? ?
Gross Profit ? ?
Operating Expenses 157,310 157,310
Income before income taxes ? ?
Income Taxes 53,485 53,485
Net Income $ ? $ ?

I have no idea what I'm doing here. I know my figures are not right. Can someone guide me in the right direction? I'm not even sure if I have the categories right on the left of the columns. Please help! I'm having a really hard time understanding this.

There are quite a few points that need to explanation:
1. In the Income Statement you have mentioned Beginning Inventory of $37,900. Where did you get it from?
2. Cost of goods purchased in the Income Statement does not match with the total of quarterly purchases
3. Cost of goods available for sale must be the same under FIFO/LIFO methods.
4. Income tax expense reported at the same figure for FIFO and LIFO? Not possible
5. Which method of inventory valuation is used? Perpetual or periodical. To use perpetual, the sales figures must also be shown on a quarterly basis.