Suppose a division of Washington Instruments Incorporated that sells computer microchips has these inventory records for January $2021$:

$($Click the icon to view the inventory records.$)$

The company's accounting records show $310$ units were sold for revenue of $$7,750.$ Operating expense for January was $$1,800.$

Read the requirements. figures to whole$-$dollar amounts. Show your computations.

Begin by preparing the income statement using LIFO, then average, and finally FIFO cost.

$\backslash$table$[[\backslash$table$[[$Washington Instruments Incorporated$],[$Income Statement for Microchip$],[$Month Ended January $31,2021]]],[$Sales revenue,LIFO,Average,FIFO$],[$$$,7,750$$$,,],[$Cost of goods sold,,$3,{400}^{TT},3,224.,],[$Gross profit,,$4,350,4,526,],[$Operating expenses,,$1,800,1,800,],[$Operating income,$$,2,550=s_{?},2,726,]]$

LIFO, then average, and finally FIFO cost.

Data table

$\backslash$table$[[$Date$,\backslash$table$[[$Item$],[$Beginning inventory$]],\backslash$table$[[$Quantity$],[140$ units$]],$Unit Cost,Total Cost$],[$Jan$,1,$$$,,$$$,840],[6,$Purchase,$60$ units,,$12,,720],[21,$Purchase,$110$ units,,$12,,1,320],[27,$Purchase,$40$ units,,$19,,760]]$

Requirements

Prepare the company's January, multistep income statement. Calculate income using the LIFO, average$-$cost$,$ and FIFO methods. Label the bottom line "Operating income." Round the average cost per unit to three decimal places and all other figures to whole$-$dollar amounts. Show your computations.

Suppose you are the financial vice president of Washington Instruments. Which inventory method will you use if your motive is to

a$.$ minimize income taxes?

b$.$ report the highest operating income?

c$.$ report operating income between the extremes of FIFO and LIFO?

d$.$ report inventory on the balance sheet at the most current cost?

e$.$ attain the best measure of net income for the income statement?

State the reason for each of your answers.