Broadhead 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:

			Units			Unit Cost
Inventory, December 31, prior year				2,990			$	11
For the current year:
Purchase, April 11				8,810				9
Purchase, June 1				7,820				14
Sales ($60 each)				10,840
Operating expenses (excluding income tax expense)	$	189,000

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? LIFO or FIFO