Score 0 of 3 pts 3 1 of 33 28 complete HW Score 6933 52 of 7

Score: 0 of 3 pts 3 1 of 33 (28 complete) HW Score: 69.33%, 52 of 75 p S6-3 (similar to) Question Help Jen Copy Center sells laser pinters and supplies. JefTerson Copy Center slarted the year wilh 90 containers of ink (average cost or $9.20 each, FIFO cost of S0.60 each, LIFO cost of S7.00 eac) During the yar, Jefferson Copy Center purchased 610 containers of ink at 59.90 and sok 600 units for $20.25 each. Jefterson Copy Center paid operating expenses throughout the year, a total of $5,500. JefTerson Copy Center\'s income statement excluding the elfects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methodsis given. (Click the icon to vew the income statement) ould you selec o a ma urn e ncome before a Jefferson opy en er s corpora on sub ec o 30% nco ne la Compute e erson op Center\'s ncor e a expense under he average. FIFO and LIFO nvertory cosing methods w hich me hou and (b) minimize ine ax expeise? (Rourid your ariswer lo the nearesl whole dollar) Jefferson Copy Center Income Statement Year Ended December 31 Average Cost Data Table FIFO LIFO Jefferson Copy Center Income Statement Year Ended December 31 Sales revenue Cost of gcods sold Gross proht Operating expenses Net icorne before tax 12.150 S12,150 5,823 5,940 6,327 5 6,210 554005 500 827 S 710 12,150 S 5,036 6,264 5 400 Average Cost FIFO LIFO 12,150 $ 5,886 12,150 $ 5,823 Sales revenue Cost of goods sold Gross profit Operating expenses Net income before tax 12,150 5,910 761 S Income tax expense 6,264 5,500 6,327 5,500 6,210 5,500 764 $ 827 $ 710 Print Done

Solution

a. FIFO method gives highest income before income tax of 827

b. LIFO gives lowest tax expense of 213

Ref		Average cost	FIFO	LIFO
a	Net income before tax	764	827	710
b= a*30%	Income tax expense	229.2	248.1	213