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Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Bank Print Supplies, Inc. Income Statement Year Ended December 31 Sales revenue Cost of goods sold Gross profit Operating expenses Net income before tax Average Cost FIFO $ $ $ 13,200 $ 13,200 $ 6,000 5,943 7,200 $ 7,257 $ 4,050 4,050 3,207 S 3,150 $ LIFO 13,200 6,060 7,140 4,050 3,090 Income tax expense Which method would you select to (a) maximize income before tax and (b) minimize income tax expense? (a) The income before taxes is maximized by using the method of inventory costing. (b) The income taxes are minimized by using the method of inventory costing.

Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Bank Print Supplies, Inc. Income Statement Year Ended December 31 Sales revenue Cost of goods sold Gross profit Operating expenses Net income before tax Average Cost FIFO $ $ $ 13,200 $ 13,200 $ 6,000 5,943 7,200 $ 7,257 $ 4,050 4,050 3,207 S 3,150 $ LIFO 13,200 6,060 7,140 4,050 3,090 Income tax expense Which method would you select to (a) maximize income before tax and (b) minimize income tax expense? (a) The income before taxes is maximized by using the method of inventory costing. (b) The income taxes are minimized by using the method of inventory costing.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Bank Print Supplies, Inc., sells laser printers and supplies. Bank Print Supplies, Inc., is a corporation subject to a 30% income tax. (Click the icon to view additional information.) Bank Print Supplies' income statement-excluding the effects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methods is given. (Click the icon to view the income statement.) Read the requirements Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Bank Print Supplies, Inc. Income Statement Year Ended December 31 Sales revenue Cost of goods sold Gross profit Operating expenses Net income before tax Average Cost FIFO $ $ $ 13,200 $ 13,200 $ 6,000 5,943 7,200 $ 7,257 $ 4,050 4,050 3,150 $ 3,207 $ LIFO (b) The income taxes are minimized by using the 13,200 6,060 7,140 4,050 3,090 Income tax expense Which method would you select to (a) maximize income before tax and (b) minimize income tax expense? (a) The income before taxes is maximized by using the method of inventory costing. method of inventory costing.
Transcribed Image Text:Bank Print Supplies, Inc., sells laser printers and supplies. Bank Print Supplies, Inc., is a corporation subject to a 30% income tax. (Click the icon to view additional information.) Bank Print Supplies' income statement-excluding the effects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methods is given. (Click the icon to view the income statement.) Read the requirements Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Bank Print Supplies, Inc. Income Statement Year Ended December 31 Sales revenue Cost of goods sold Gross profit Operating expenses Net income before tax Average Cost FIFO $ $ $ 13,200 $ 13,200 $ 6,000 5,943 7,200 $ 7,257 $ 4,050 4,050 3,150 $ 3,207 $ LIFO (b) The income taxes are minimized by using the 13,200 6,060 7,140 4,050 3,090 Income tax expense Which method would you select to (a) maximize income before tax and (b) minimize income tax expense? (a) The income before taxes is maximized by using the method of inventory costing. method of inventory costing.
Bank Print Supplies, Inc., sells laser printers and supplies. Bank Print Supplies, Inc., is a corporation subject to a 30% income tax. i (Click the icon to view additional information.) Bank Print Supplies' income statement-excluding the effects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methods-is given. (Click the icon to view the income statement.) Read the requirements. Requirements Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Which method would you select to (a) maximize income before tax and (b) minimize income tax expense? (Round your answer to the nearest whole dollar.) More info Print Done Assume Bank started the year with 90 containers of ink (average cost of $9.20 each, FIFO cost of $8.80 each, LIFO cost of $7.90 each). During the year, the company purchased 720 containers of ink at $10.10 and sold 600 units for $22.00 each. Bank paid operating expenses throughout the year, a total of $4,050. Print Done Xg metho X Data table Sales revenue Cost of goods sold Gross profit Operating expenses Net income before tax $ $ Bank Print Supplies, Inc. Income Statement Year Ended December 31 Average Cost FIFO 13,200 $ 6,000 Print 7,200 4,050 3,150 $ Done 13,200 $ 5,943 7,257 4,050 3,207 $ LIFO 13,200 6,060 7,140 4,050 3,090 X Next
Transcribed Image Text:Bank Print Supplies, Inc., sells laser printers and supplies. Bank Print Supplies, Inc., is a corporation subject to a 30% income tax. i (Click the icon to view additional information.) Bank Print Supplies' income statement-excluding the effects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methods-is given. (Click the icon to view the income statement.) Read the requirements. Requirements Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Which method would you select to (a) maximize income before tax and (b) minimize income tax expense? (Round your answer to the nearest whole dollar.) More info Print Done Assume Bank started the year with 90 containers of ink (average cost of $9.20 each, FIFO cost of $8.80 each, LIFO cost of $7.90 each). During the year, the company purchased 720 containers of ink at $10.10 and sold 600 units for $22.00 each. Bank paid operating expenses throughout the year, a total of $4,050. Print Done Xg metho X Data table Sales revenue Cost of goods sold Gross profit Operating expenses Net income before tax $ $ Bank Print Supplies, Inc. Income Statement Year Ended December 31 Average Cost FIFO 13,200 $ 6,000 Print 7,200 4,050 3,150 $ Done 13,200 $ 5,943 7,257 4,050 3,207 $ LIFO 13,200 6,060 7,140 4,050 3,090 X Next
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