3. Which of these two methods is preferable in terms of (a) net earnings and (b) income taxes paid (cash flow)? Item A Item B (a) Net earnings (b) Income taxes paid Pool Corporation Inc. reported in its recent annual report that the industry experienced some price deflation one year followed by more normalized price inflation of approximately 2 percent overall despite price deflation for certain chemical products. This suggests that in some years Pool's overall inventory costs rise, and in some years they fall. Furthermore, in many years, the costs of some Inventory Items rise while others fall. Assume that Pool has only two product items in its inventory this year. Purchase and sale Information are presented below. Pool uses a perpetual Inventory system. Inventory Item A Inventory Item B Transaction Units Unit Cost Units Unit Cost Beginning inventory 40 $6 40 $6 Purchases, February 7 80 8 80 S Sales, February 28 50 78 Purchases, March 16 100 9 108 3 Sales, April 28 110 90