E$7-11$

Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory $($ending inventory December $31,$ prior year$),2,140$ units at $$37$; purchases, $7,850$ units at $$39$; expenses $($excluding income taxes$),$ $$193,100$; ending inventory per physical count at December $31,$ current year, $1,730$ units; sales, $8,260$ units; sales price per unit, $$80$; and average income tax rate, $32$ percent.E$7-11$

Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory $($ending inventory

December $31,$ prior year$),2,140$ units at $$37$; purchases, $7,850$ units at $$39$; expenses $($excluding income taxes$),$ $$193,100$; ending

inventory per physical count at December $31,$ current year, $1,730$ units; sales, $8,260$ units; sales price per unit, $$80$; and average income

tax rate, $32$ 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.

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

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.

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

Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount.