MusicBiz.net specializes in sound equipment. Because each inventory item is expensive, MusicBiz uses a perpetual inventory system. Company records indicate the following data for a line of speakers:

Date

June

Item

Quantity

Unit Cost

Sale Price

1

Balance

5

$90

6

Purchase

12

95

8

Sale

3

$150

30

Sale

8

155

Required

1. Determine the amounts that MusicBiz should report for cost of goods sold and ending inventory 2 ways:

a. FIFO b. LIFO

2. MusicBiz uses the FIFO method. Prepare MusicBiz’s income statement for the month ended June 30, 20X5, reporting gross profit. Operating expenses totaled $320, and the income tax rate was 40%.