Exercise 5-7A (Algo) Effect of FIFO Versus LIFO on income tax expense LO 5-1 The Brick Company had cash sales of $224,300 for Year 1, its first year of operation. On April 2, the company purchased 250 units of inventory at $175 per unit. On September 1, an additional 188 units were purchased for $193 per unit. The company had 31 units on hand at the end of the year. The company's income tax rate is 40 percent. All transactions are cash transactions. Required a. 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 FIFO. c. Compute net income using LIFO. e. Which method, FIFO or LIFO, produced the larger amount of assets on the balance sheet? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required E 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. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.) Show less A

Exercise 5-7A (Algo) Effect of FIFO Versus LIFO on income tax expense LO 5-1 The Brick Company had cash soles of $224,300 for Year 1, its first year of operation. On April 2, the company purchased 250 units of Invenchy at $175 per unit On September 1, an additional 188 units were purchased for $193 per unti. The company had 31 units on hand at the end of the year. The companys income tax rete is 40 percent. All transactions are cash transactions. Required n. The preceding potagraph deocribes five accounting events: (0) a snles transection, (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 fist a FiFO and then a UFO cost flow. b. Compute net income using FIFO. c. Compute net income using LIFO. c. Which methad, FFO or LIFO, produced the larger amaunt of assets on the balance sheet? Complete this question by entering yeur answers in the tabs below. The proceding peragraph describes five accounting events: (1) a sales transaction, (2) the first purchase of inventory, (3) a second purchase of imventary, (4) the recugnition of Exercise S.7A (Algo) Effect of FIFO Versus LIFO on income tax expense LO 5.1 hend at the end of the yeat. The company's income tex rate is 40 percent. All vansactions are cash transactions. Required a. The preceding poragroph describes five accounting ovents: (7) a sales transaction, (Z) the first purchase of imventory, (3) a second putchase of inveriony. (4) the recognisen of cost of goods sold expense. and (5) the payment of income tax expense. Show the amoums of each event in horizontal statements models, essuming fist a FiFO and then a UFO cost flow. b. Compute net income using FIFO. c. Compute net hcome using UIFO. e. Which method, FIFO or LFO. produced the larger amount of assets on the botance sheet? Complete this question by entering your answers in the tabs below. The preceding paragraph describes five accounting events: (1) a seles vansaction, (2) the first purchase of inventery, (3) a second purchase ot inventory, (4) the recouncion of