Comparison of Inventory Costing Methods-Perpetual System (Appendix) Bitten Company's inventory records show 602 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October: Date Unit Purchases Unit Sales October 4 492 @ $10 October 8 806 @ $5.33 October 9 697 @ $10 October 18 709 @ $5.65 October 20 799 @ $11 October 29 803 @ $5.99 All expenses other than cost of goods sold amount to $3030 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes. Required: 1. Prepare a chart comparing cost of goods sold and ending inventory using the perpetual system and the following costing methods. In your calculations round moving average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar. Bitten Company Comparison for Cost of Goods Sold and Ending Inventory Using the Perpetual System For Moving Average, FIFO and LIFO Cost Methods Cost of Goods Sold Ending Inventory Total Moving Average 15,108 X 5,145 X 16,122 FIFO 10,583 5,539 16,122 LIFO 11,353 4,769 X 16,122 3. Prepare income statements for each of the three methods. When required, round your answers to the nearest dollar. Bitten Company Income Statement For the Month of October Moving Average FIFO LIFO Sales $ 20,679 20,679 20,679 Cost of goods sold 10,976 X 10,583 11,353 Gross profit 9,703 X 10,096 9,326 X Operating expenses 3,030 3,030 3,030 Income before taxes 6,673 X 7,066 6,296 X Income tax expense 2,002 2,120 1,889 Net income 4,671 X 4,946 4,407 Feedback Check My Work Be sure to use the relevant information from (1) in your Income Statement. Review the parts of a multiple step income statement. 4. Will the company pay more or less tax if it uses FIFO rather than LIFO? More taxes How much more or less? $ 232 x