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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 FIFO Average Cost Print 13,200 $ 6,000 7,200 4,050 3,150 $ Done 13,200 $ 5,943 7,257 4,050 3,207 S LIFO 13,200 6,060 7,140 4,050 3,000 More info 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 Print - X 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.) Done

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 FIFO Average Cost Print 13,200 $ 6,000 7,200 4,050 3,150 $ Done 13,200 $ 5,943 7,257 4,050 3,207 S LIFO 13,200 6,060 7,140 4,050 3,000 More info 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 Print - X 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.) Done

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. EEE (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 Average Cost FIFO $ $ 13,200 $ 13,200 $ 6,000 5,943 $ 7,200 $ 7,257 $ 4,050 4,050 3,150 $ 3,207 $ LIFO 13,200 6,080 7,140 4,050 3,090 Operating expenses Net income before tax 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.
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. EEE (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 Average Cost FIFO $ $ 13,200 $ 13,200 $ 6,000 5,943 $ 7,200 $ 7,257 $ 4,050 4,050 3,150 $ 3,207 $ LIFO 13,200 6,080 7,140 4,050 3,090 Operating expenses Net income before tax 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.
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 FIFO Average Cost Print 13,200 $ 6,000 7,200 4,050 3,150 $ Done 13,200 $ 5,943 7,257 4,050 3,207 S LIFO 13,200 6,060 7,140 4,050 3,090 More info 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 Print 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.) X Done
Transcribed Image Text: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 FIFO Average Cost Print 13,200 $ 6,000 7,200 4,050 3,150 $ Done 13,200 $ 5,943 7,257 4,050 3,207 S LIFO 13,200 6,060 7,140 4,050 3,090 More info 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 Print 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.) X Done
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