Emily Company uses a periodic inventory system. At the end of the annual accounting period, December $31$ of the current year, the

accounting records provided the following information for product $2$:

Units

Unit Cost

Inventory, December $31,$ prior year

$2,830$

$ $15$

For the current year:

Purchase, April $11$

$8,860$

$16$

Purchase, June $1$

$7,980$

$21$

Sales $($$$60$ each$)$

$10,880$

Operating expenses $($excluding income tax expense$)$

$ $187,000$

Required:

$1.$ Prepare a separate income statement through pretax income that details cost of goods sold for $($a$)$ Case A: FIFO and $($b$)$ Case B:

LIFO.

$2.$ Compute the difference between the pretax income and the ending inventory amount for the two cases.

$3.$ Which inventory costing method may be preferred for income tax purposes?

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Required $3$

B: ure a separate income statement through pretax income that details cost of goods sold for $($a$)$ Case A: FIFO and $($b$)$ Cast