Gable Inc. is a provider of home furnishings. The company uses the FIFO inventory method. The following information was taken from the companys recent financial statements (dollar amounts are in thousands):

Cost of Goods sold	$1,850,000
Income before taxes	125,000
Income taxes expense (and payments)	52,500
Net Income	72,500
Net Cash provided by operating activities	123,250

The financial statements are revealed that had Gable been using LIFO, its cost of good sold would have been $1,865,000. The companys income taxed in payments amount to approximately 40% 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 companies ending inventory? Defend your answer.

b. Assuming that Lollar had been using LIFO, compute the following amounts for the current year. Show your supporting computations, with dollar amounts in thousands.

1. Income before taxes

2. Income taxes expense

3. Net income

4. Net cash provided by operating activities