Problem 5-33A (Algo) Effect of FIFO Versus LIFO on income tax expense LO 5-6 The Brick Company had cash sales of $221,700 for Year 1, its first year of operation. On April 2, the company purchased 229 units of inventory at $190 per unit. On September 1, an additional 172 units were purchased for $209 per unit. The company had 62 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. Record the amounts of each event in horizontal statements models like the following ones, assuming first a FIFO and then a LIFO cost flow. b. Compute net income using FIFO. c. Compute net income using LIFO.

Problem 5-33A (Algo) Effect of FIFO Versus LIFO on income tax expense LO 5-6 The Brick Company had cash sales of $221,700 for Year 1, its first year of operation. On April 2, the company purchased 229 unit: of inventory at $190 per unit On September 1 , an additional 172 units were purchased for $209 per unit. The company had 62 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 Record the amounts of each event in horizontal statements models like the following ones, assuming first a FIFO and then a LIFO cost flow. b. Compute net income using FIFO. c. Compute net income using LIFO