Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory $($ending inventory December $31,$ prior year$),2,090$ units at $$36$; purchases, $8,000$ units at $$38$; expenses $($excluding income taxes$),$ $$193,300$; ending inventory per physical count at December $31,$ current year, $1,740$ units; sales, $8,350$ units; sales price per unit, $$78$; and average income 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?

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Req $1b$

Req $2$

Req $3$

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

Net income

Income taxes paid