Effects of LIFO and FIFO The Delhomme Company is starting in business on December 31, 20X0. In each half year, from 20X1 through 20X4, it expects to purchase 1,000 units and sell 500 units for the amounts listed next. In 20X5, it expects to purchase no units and sell 4,000 units for the amount indicated in the following table: 20X1 20X2 20X3 20X4 20X5 Purchases First 6 months $1,000 $2,000 $3,000 $3,000 Second 6 months 2,000 2,500 3,000 4,000 Total $3,000 $4,500 $6,000 $7,000 Sales (at selling price) $5,000 $5,000 $5,000 $5,000 $20,000 Assume that there are no costs or expenses other than those shown earlier. The tax rate is 40%, and taxes for each year are payable on December 31 of each year. Delhomme Company is trying to decide whether to use periodic FIFO or LIFO throughout the 5-year period. 1. What was net income under FIFO for each of the 5 years? under LIFO? Show calculations. 2. Explain briefly which method, LIFO or FIFO, seems more advantageous, and why.