E7-11 (Algo) Choosing LIFO versus FIFO When Costs Are Rising and Falling (LO 7-3] Use the following information to complete this exercise: sales, 550 units for $16,950; beginning inventory, 300 units, purchases, 400 units; ending inventory, 150 units, and operating expenses. $7,000. Required: 1. Complete the table for each situation. In Situations A and B (costs rising), assume the following: beginning inventory, 300 units at $15 - $4,500; purchases, 400 units at $17 - $6,800. In Situations and D (costs falling), assume the opposite that is, beginning inventory, 300 units at $17 = $5,100; purchases, 400 units at $15 - $6,000. Use periodic inventory procedures . Costa Rising Situation 3 Situation A FIFO 1 $ 16,950 16,950 $ $ nces 4,500 6.800 11,300 2.550 LIFO $ 4,500 6.800 11.300 2.250 Sales Revenue Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income Costa Falling Situation C Situation D FIFO LIFO $ 16,950 $ 16,950 $ 5,100 $ 5.100 6,000 6,000 11,100 11.100 2.250 2,5501 8.850 8,550 8,150 8300 7.000 7,000 1.150 1.300 350 390 8.750 8,200 7,000 1.200 360 840 TERIER 9,050 8,0501 7.000 1.050 315 $