Max Company's First Year in Operation Was 2016

Essay

Max Company's first year in operation was 2016.The following inventory purchase information comes from Max's accounting records for the year.
In December 2016,Max sold 350 units for $480 each.Operating expenses for the year were $30,000,and the tax rate was 30%.
Required: a)Calculate the cost of goods sold by LIFO and by FIFO.
b)What amount of income tax would Max have to pay if it uses LIFO? If it uses FIFO?
c)Assuming that the results for 2016 are representative of what Max can generally expect,would you recommend that the company use LIFO or FIFO? Explain.