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 For the current year: Purchase, April 11 Purchase, June 1 2,890 $ 11 8,950 12 7,910 17 Sales ($53 each) 10,940 Operating expenses (excluding income tax expense) $ 190,000 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 Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. Sales revenue EMILY COMPANY Income Statement For the Year Ended December 31, current year Case A FIFO $ 579,820 Cost of goods sold: Beginning inventory $ 31,790 Purchases 107,400 Purchases 134,470 Goods available for sale 273,660 Ending inventory 132,430 Cost of goods sold Gross profit Operating expenses Pretax income 141,230 438,590 190,000 Case B LIFO $ 579,820 $ 31,790 107,400 134,470 273,660 102,830 170,830 408,990 190,000 $ 248,590 $ 218,990 < Required 1 Required 2 >