Gable, Inc., is a provider of home furnishings. The company uses the FIFO inventory method. The following information was taken from

the company's recent financial statements $($dollar amounts are in thousands$).$

The financial statements also revealed that had Gable been using LIFO, its cost of goods sold would have been $$1,865,000.$ The $\frac{?}{\text{b}\text{a}\text{r}}($ Page $374)$

company's income taxes and payments amount to approximately $40$ percent of income before taxes.

a$.$ Explain how LIFO can result in a higher cost of goods sold. Would you expect LIFO to result in a greater or lesser valuation of the

company's ending inventories? Defend your answer.

b$.$ Assuming that Gable had been using LIFO, compute the following amounts for the current year. Show your supporting computations,

with dollar amounts in thousands.

Income before taxes

Income taxes expense $($which are assumed equal to income taxes actually paid$)$

Net income

Net cash provided by operating activities