5 3.33 points E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO LO7-2, 7-3 Emily Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: eBook Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Units 2,930 Unit Cost $ 12 8,840 13 7,970 18 Sales ($51 each) 10,950 Operating expenses (excluding income tax expense) $ 189,000 Hint Print References Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. 3. Which inventory costing method may be preferred for income tax purposes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 3.33 5 Required 1 Required 2 Required 3 points eBook Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. Hint Cost of goods sold: Print EMILY COMPANY Income Statement For the Year Ended December 31, current year Goods available for sale References Cost of goods sold Case A FIFO Case B LIFO Required 1 Required 2 > HW6 Chapter 7 Homework i 5 Saved Inventory, December 31, prior year 2,930 $ 12 For the current year: Purchase, April 11 8,840 13 Purchase, June 1 7,970 18 Sales ($51 each) 10,950 Operating expenses (excluding income tax expense) $ 189,000 3.33 points eBook Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. 3. Which inventory costing method may be preferred for income tax purposes? Hint Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Print References Compute the difference between the pretax income and the ending inventory amount for the two cases. Note: Loss amounts should be indicated with a minus sign. Comparison of Amounts Case A Case B Difference FIFO LIFO Pretax income Ending inventory < Required 1 Required 3 > 3.33 5 points accounting records provided the following information for product 2: Inventory, December 31, prior year For the current year: Purchase, April 11 Units Unit Cost 2,930 $ 12 8,840 13 7,970 18 Sales ($51 each) 10,950 Operating expenses (excluding income tax expense) $ 189,000 Purchase, June 1 eBook Hint Print Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. 3. Which inventory costing method may be preferred for income tax purposes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 References Which inventory costing method may be preferred for income tax purposes? Which inventory costing method may be preferred for income tax purposes? < Required 2 Required 3