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User Print Supplies, Inc., sells laser printers and supplies. McDonough Print Supplies, Inc., is a corporation subject to a 3 5 % income tax. LOADING...

User
Print Supplies, Inc., sells laser printers and supplies. McDonough Print Supplies, Inc., is a corporation subject to a 35% income tax.
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McDonough Print Supplies' income statementlong dashexcluding the effects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methodslong dashis given.
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Part 1
Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods.
McDonough Print Supplies, Inc.
Income Statement
Year Ended December 31
Average Cost
FIFO
LIFO
Sales revenue
$12,150
$12,150
$12,150
Cost of goods sold
5,886
5,823
5,940
Gross profit
$6,264
$6,327
$6,210
Operating expenses
5,000
5,000
5,000
Net income before tax
$1,264
$1,327
$1,210
Income tax expense
Assume McDonough started the year with 90 containers of ink(average cost of $ 9.20each, FIFO cost of $ 8.60each, LIFO cost of $ 7.80each). During the year, the company purchased 610 containers of ink at $ 9.90 and sold 600 units for $ 20.25 each. McDonough paid operating expenses throughout the year, a total of $ 5 comma 000. McDonough Print Supplies, Inc.
Income Statement
Year Ended December 31
Average Cost
FIFO
LIFO
Sales revenue
$12,150
$12,150
$12,150
Cost of goods sold
5,886
5,823
5,940
Gross profit
6,264
6,327
6,210
Operating expenses
5,000
5,000
5,000
Net income before tax
$1,264
$1,327
$1,210

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