Mobile Phones Direct Inc is a mobile phone distributor which began business on January 1st. It had the following transactions during January: Purchases Date Quantity Price Total Cost 2-Jan 5000 $ 10 $ 50,000 12-Jan 3000 $ 11 $ 33,000 18-Jan 4000 $ 12 $ 48,000 $ 131,000 Total Sales Sales Quantity Price 30-Jan 11,000 $ 20 20 Ending Inventory 31-Jan 1,000 $ 220,000 Questions: a) Calculate the value of the ending inventory and cost of goods sold under a) LIFO (last-in, first-out) and b) FIFO (first-in, first-out). Which method would result in a lower Gross Profit? Why? Would this always be true? Which method will result in a higher income tax bill? Why?