Requirement 1. Determine the amounts that

MusicSchoolMusicSchool

should report for cost of goods sold and ending inventory twoways: a. FIFO and b. LIFO.

(MusicSchoolMusicSchool

uses a perpetual inventory system.)

a.

Using the FIFO method, the cost of goods sold is

$

and the ending inventory is

$

.

b.

Using the LIFO method, the cost of goods sold is

$

and the ending inventory is

$

.

Requirement 2.

MusicSchoolMusicSchool

uses the FIFO method. Prepare the company's income statement for the month ended

MarchMarch

31,

20182018,

reporting gross profit. Operating expenses totaled

$ 290$290,

and the income tax rate was

35 %35%.

(Round answers to the nearest dollar.)

MusicSchool

Income Statement

Month Ended March 31, 2018

		Net income

Date

Item

Quantity

Unit Cost

Sale Price

Mar

1

Balance. . . . . . . . . . .

18

$52

2

Purchase. . . . . . . . . .

3

59

7

Sale. . . . . . . . . . . . . . .

7

$105

13

Sale. . . . . . . . . . . . . . .

5

92