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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 $ $9\mathrm{.}20$each$,$ FIFO cost of $ $8\mathrm{.}60$each$,$ LIFO cost of $ $7\mathrm{.}80$each$).$ During the$$ year, the company purchased $610$ containers of ink at $ $9\mathrm{.}90$ and sold $600$ units for $ $20\mathrm{.}25$ each. McDonough paid operating expenses throughout the$$ 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$

income statement $-$ 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$