E7-8 Evaluating the Effects of Inventory Methods on Income from Operations, Income Taxes, and Net Income (Periodic) [LO 7-3]

Courtney Company uses a periodic inventory system. The following data were available: beginning inventory, 1,800 units at $40; purchases, 4,200 units at $42; operating expenses (excluding income taxes), $95,500; ending inventory per physical count at December 31, 1,150 units; sales price per unit, $80; and average income tax rate, 30%.

Required:

1.	Prepare income statements under the FIFO, LIFO, and weighted average costing methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)

2-a.	Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are rising?

	LIFO
	FIFO

2-b.	Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are rising?

	LIFO
	FIFO

3-a.

Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are falling?

	LIFO
	FIFO

3-b.

Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are falling?

	LIFO
	FIFO