Exercise 5-7A (Algo) Effect of FIFO Versus LIFO on income tax expense LO 5-1 The Brick Company had cash sales of $220,800 for Year 1 , its first year of operation. On April 2, the company purchased 216 units of inventory at \$210 per unit. On September 1 , an additional 162 units were purchased for $231 per unit. The company had 67 units on hand at the end of the year. The company's income tax rate is 40 percent. All transactions are cash transactions Required o. The preceding paragraph describes five accounting events: (1) 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 payment of income tax expense Show the amounts of each event in horizontal statements models, assuming first a FIFO and then a LIFO cost flow. b. Compute net income using FFO c. Compute net income using LIFO. e. Which method, FFO or UFO, produced the larger amount of assets on the balance sheet