1. Prepare the company's January, multistep income statement. Calculate income using the LIFO, average-cost, and FIFO methods. Label the bottom line "Operating income." Round the average cost per unit to three decimal places and all other figures to whole-dollar amounts. Show your computations. 2. Suppose you are the financial vice president of Texas Instruments. Which inventory method will you use if your motive is to a. minimize income taxes? b. report the highest operating income? c. report operating income between the extremes of FIFO and LIFO? d. report inventory on the balance sheet at the most current cost? e. attain the best measure of net income for the income statement? State the reason for each of your answers. Date Item Quantity Unit Cost Total Cost Jan 1 Beginning inventory 100 units $ 8 $ 800 6 Purchase 60 units 9 540 21 Purchase 150 units 9 1,350 27 Purchase 90 units 10 900 Suppose a division of Texas Instruments Incorporated that sells computer microchips has these inventory records for January 2021 (Click the icon to view the inventory records.) The company's accounting records show 310 units were sold for revenue of $6,770. Operating expense for January was $1,900. Read the requirements. Requirement 1. Prepare the company's January, multistep income statement. Calculate income using the LIFO, average-cost, and FIFO methods. Label the bottom line "Operating income." Round the average cost per unit to three decimal places and all other figures to whole-dollar amounts. Show your computations. Begin by preparing the income statement using LIFO, then average, and finally FIFO cost. Texas Instruments Incorporated Income Statement for Microchip Month Ended January 31, 2021 LIFO Average FIFO Sales revenue 6,770 6,770 6,770 2,690 3190 Cost of goods sold Gross profit Operating expenses 1,900 1,900 1,900 Operating income Requirement 2. Suppose you are the financial vice president of Texas Instruments Incorporated. Which inventory method will you use if your motive is to a. minimize income taxes? Use to minimize income taxes. Operating income under this method is lowest when inventory unit costs are as they are in this case. (If inventory unit costs were going the opposite direction, income under would be lowest.) b. report the highest operating income? Use to report the highest operating income. Income under this method is highest when inventory unit costs are as in this situation. c. report operating income between the extremes of FIFO and LIFO? Use to report an operating income amount between the FIFO and LIFO extremes. This is true in this situation and in others when inventory unit costs are d. report inventory on the balance sheet at the most current cost? Use to report inventory on the balance sheet at the most current cost. The inventory costs are expensed as cost of goods sold, leaving in ending inventory the costs of the period. e. attain the best measure of net income for the income statement? expense with current revenue. The inventory costs are Use to attain the best measure of net income. This method produces the best current expense recognition by matching the expensed as cost of goods sold