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				2,890			$	13
For the current year:
Purchase, April 11				8,960				14
Purchase, June 1				7,950				19
Sales ($57 each)				10,870
Operating expenses (excluding income tax expense)	$	188,500

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. EMILY COMPANY Income Statement For the Year Ended December 31, current year Case A FIFO Case Case B LIFO Cost of goods sold: Goods available for sale Cost of goods sold 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. Comparison of Amounts Case A Case B FIFO LIFO Difference Pretax income Ending inventory 3. Which inventory costing method may be preferred for income tax purposes? Which inventory costing method may be preferred for income tax purposes