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 $2$ :

Inventory, December $31,$ prior year

For the current year:

Purchase, April $11$

Purchase, June $1$

Sales each$)$

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

Required:

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

LIFO.

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

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