Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory $($ending inventory December $31,$ prior year$),2,190$ units at $$38$; purchases, $7,830$ units at $$40$; expenses $($excluding income taxes$),$ $$194,300$; ending inventory per physical count at December $31,$ current year, $1,750$ units; sales, $8,270$ units; sales price per unit, $$78$; and average incom tax rate, $30$ percent.

Required:

$1-$a$.$ Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods.

$1-$b$.$ Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods.

$2.$ Between FIFO and LIFO, which method is preferable in terms of $($a$)$ net income and $($b$)$ income taxes paid $($cash flow$)?$

$3.$ Between FIFO and LIFO, which method is preferable in terms of $($a$)$ net income and $(b)$ income taxes paid $($cash flow$),$ assuming that prices were falling?

Complete this question by entering your answers in the tabs below.