E7-9 Choosing LIFO versus FIFO When Costs Are Rising and Falling (LO 7-3] Use the following information to complete this exercise: sales, 950 units for $20,400; beginning inventory, 700 units; purchases, 800 units; ending inventory, 550 units; and operating expenses, $7,800. Required: 1. Complete the table for each situation. In Situations A and B (costs rising), assume the following: beginning inventory, 700 units at $8 = $5,600; purchases, 800 units at $10 = $8,000. In Situations C and D (costs falling), assume the opposite; that is, beginning inventory, 700 units at $10 = $7,000; purchases, 800 units at $8 = $6,400. Use periodic inventory procedures. Costs Rising Situation A Situation B Costs Falling Situation C Situation D FIFO LIFO FIFO LIFO $ 20,400 Sales Revenue $ 20,400 $20,400 $ 20,400 $ 5,600 Beginning Inventory Purchases 8,000 Goods Available for Sale 13,600 0 0 0 Ending Inventory 5,500 0 0 0 Cost of Goods Sold Gross Profit 7,800 7,800 7,800 Operating Expenses Income from Operations Income Tax Expense (30%) Net Income 8,100 12,300 7,800 4,500 1,350 $ 3,150