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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

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 2,910 $12
For the current year:
Purchase, April 11 8,940 10
Purchase, June 1 7,920 15
Sales ($53 each) 10,980
Operating expenses (excluding income tax expense) $185,000
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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. BROADHEAD COMPANY Income Statement For the Year Ended December 31, current year Case A FIFO Case B LIFO Cost of goods sold Goods available for sale 0 Cost of goods sold 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 3. Which inventory costing method may be preferred for income tax purposes? O FIFO OLIFO

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