Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory $($ending inventory December $31,$ prior year$),2,120$ units at $$37$; purchases, $7,810$ units at $$39$; expenses $($excluding income taxes$),$ $$194,400$; ending inventory per physical count at December $31,$ current year, $1,690$ units; sales, $8,240$ units; sales price per unit, $$78$; and average income tax rate, $34$ 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?