MicroSystems Case
MicroSystems reports the following transactions for for one of the electronic components that it
sells. It follows the perpetual inventory system.
The company sold units on the following dates:
Required.
As of December the company had units on hand. Determine the Cost of Goods Sold and cost
of Ending Inventory assuming each of the following methods:
Weighted Average Cost
FIFO
LIFO
Please enter your responses in the table below. Each cell should be filled out.
Now assume that:
Units sold during the year for $ each.
Other operating expenses were $
The income tax rate is
Prepare a basic Income Statement for each of the three Inventory methods, and recommend which
method you would suggest MicroSustems, should choose if it wants to minimize its income taxes. The
basic Income Statement should contain Sales, Cost of Goods Sold, Gross Profit, SG&A Income before
taxes, Income Tax, and Net Income.
