MicroSystems Case

MicroSystems reports the following transactions for $2023$ for one of the electronic components that it

sells. It follows the perpetual inventory system.

The company sold $400$ units on the following dates:

Required.

$1.)$ As of December ${31}_{vv}^{st}$ the company had $20$ units on hand. Determine the Cost of Goods Sold and cost

of Ending Inventory assuming each of the following methods:

Weighted Average Cost

FIFO

LIFO

Please enter your responses in the table below. Each cell should be filled out.

$2.)$ Now assume that:

Units sold during the year for $$20$ each.

Other operating expenses were $$500.$

The income tax rate is $25\%.$

Prepare a basic Income Statement for each of the three Inventory methods, and recommend which

method you would suggest MicroSustems, should choose if it wants to minimize its income taxes. The

basic Income Statement should contain Sales, Cost of Goods Sold, Gross Profit, SG&A$,$ Income before

taxes, Income Tax, and Net Income.