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%.