Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,130 units at $35; purchases, 7,800 units at $37; expenses (excluding income taxes), $193,200; ending inventory per physical count at December 31, current year, 1,690 units; sales, 8,240 units; sales price per unit, $76; and average income tax rate, 30 percent.

Required information

Required:

1. Compute cost of goods sold and prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. (Round your final answers to nearest whole dollar. Do not round your intermediate calculations.)

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?