LO 7-4 CP7-2 Evaluatig the Income Statement and Income Tax Effects of Lower of Cos or Market r 31. The company used the FIFO inventory costing method, but it failed to apply LCM to the ending inventory. The pre- liminary income statement follows $280,000 Sales Revenue Cost of Goods Sold 30,000 182,000 212,000 44,000 Beginning Inventory Purchases Goods Available for Sale Ending Inventory (FIFO cost) 168,000 112,000 61,000 51,000 15,300 35,700 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income