Lunar Company uses a perpetual inventory system. The company's accounting records provided the following information for Product 2: Units 4,500 Unit Cost $12 Transactions a. Inventory, December 31, 2016 For the year 2017: b. Purchase, April 11 c. Sale, May 1 ($30 each) d. Purchase, June 1 e. Sale, July 3 ($30 each) f. Operating expenses (excluding income tax expense). $86,500 10,500 6,500 9,500 7,500 Required: 1. Prepare a statement of earnings for 2017, through pretax earnings, showing the detailed computation of cost of sales for two cases: a. Case A-FIFO b. Case B-Weighted average (Round intermediate calculations to 2 decimal place.) b. Case B-Weighted average (Round intermediate calculations to 2 decimal place.) LUNAR COMPANY Statement of Earnings (Partial) For the Year Ended December 31, 2017 Case A Case B Weighted Average FIFO Cost of sales: 2. Calculate the pretax earnings and the ending inventory amounts between the two cases. Comparison of Amounts Case A Case B FIFO Weighted Average Pretax earnings Difference Ending Inventory Difference 3. Which inventory costing method may be preferred for income tax purposes? FIFO Weighted Average 4. Prepare journal entries to record transactions (b) through (e), as well as the cost of sales at December 31. 2017, assuming that Lunar uses FIFO for inventory costing. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 6 7 Record purchase of goods on account. Note: Enter debits before credits