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 2,880 $ 14

For the current year:

Purchase, April 11 8,880 12

Purchase, June 1 7,860 17

Sales ($50 each) 10,960

Operating expenses (excluding income tax expense) $ 193,500

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.

Comparison of Amounts

	Case A	Case B
	FIFO	LIFO	Difference
Pretax Income
Ending Inventory