E7-9 Choosing LIFO versus FIFO When Costs Are Rising and Falling [LO 7-31 Use the following information to complete this exercise: sales, 550 units for $12,500; beginning inventory, 300 units; purchases, 400 units; ending inventory, 150 units; and operating expenses, $4,000 Required 1. Complete the table for each situation. In Situations A and B (costs rising), assume the following beginning inventory, 300 units at $12 $3,600; purchases, 400 units at $13 $5,200. In Situations C and D (costs falling), assume the opposite, that is, beginning inventory, 300 units at $13 = $3,900; purchases, 400 units at $12 = $4,800. Use periodic inventory procedures Costs Rising Costs Falling Situation A Situation B Situation C Situation D FIFO LIFO FIFO LIFO $ 12,500 $12,500 $12,500 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 12,500 $ 3,600 5,200 8,800 1,950 6,850 5,650 4,000 1,650 495 $ 1,155 0 4,000 4,000 4,000