Exercise 5-7A (Algo) Effect of FIFO Versus LIFO on income tax expense LO 5-1 The Brick Company had cath sales of $224,900 for Year 1, its first year of operation. On April 2. the company purchased 207 units of inventory at $200 per unit On September 1 an additional 155 units were purchased for $220 per unit. The company had 36 units on hand at the end of the year. The companys income tax rate is 40 percent. All transactions are cash transactions. Required a. The preceding paragraph describes five accounting events ( 0 a sales transaction, (2) the first purchase of inventory. (3) a second purchase of inventory. (4) the recognition of cost of goods sold expense, and (5) the poyment of income tax expense. Show the amounts of each event in horizontal stamements modeis, assuming first a FIFO and then a LIFO cost flow b. Compute net income using PFO c. Compute net irkcome using UFO. e. Which method, FFOO or UFO, produced the Iarget amount of assets on the balance sheer? Complete this question by entering your answers in the tabs below. The preceding paragraph describes five accounting eventse (1) a saint transaction, (2) the fist purchase of inventory, (3) a second purchase of inventory, (4) the tecconition of cost of poods sold expense, and (5) the payment of income tax expense. Show the amounts of esch event in horizontat itatements modele. assuming first of Firo and then a UFo