a) Can a business earn a Gross Profit but still report a Net Loss? Explain your answer. Hint: You'll need to carefully review the structure of the multi-step Income Statement prior to answering. Make sure you understand how both Gross Profit and Net Income(or loss) is calculated using a multi-step Income Statement.

b) If suppliers increase the price they charge you to buy inventory over a given period of time, which method, FIFO or LIFO, would result in a higher Gross Profit? Why? Explain the reasoning for your answer.