Teddie Bower,Inc.,reported the following data in its annual financial statements

(dollars in thousands):

1999 2000 Sales $333,667 $313,456 Cost of goods sold—LIFO 32,587 44,690 Cost of goods sold—FIFO 30,198 45,833 Ending inventory—LIFO 11,189 10,567 Ending inventory—FIFO 15,999 14,234 Net income—LIFO 34,000 33,500 Net income—FIFO 38,980 37,765 Required

a. Calculate the number of days’ sales in ending inventory (NDS) under both LIFO and FIFO.

b. Calculate the gross profit percentage under both LIFO and FIFO.

c. Discuss the differences in inventory levels, income, and gross profit under both LIFO and FIFO.

d. Discuss why a firm might prefer LIFO under these circumstances. E-967