P7-3 (Static) Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow LO7-2, 7-3 At the end of January of the current yeac, the records of Donner Company showed the following for a particular item that sold at $16 per unit: Required: 1a. Assuming the use of a periodic imventory system, compute Cost of Goods Sold under each method of inventory average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the secand sale was selected from the January 12 purchase. 1b. Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory (a) average cost, (b) FIFO, (c) LFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale wos solocted from the January 12 purchase. 2a. Between FIFO and LIFO, which method would result in the higher pretax income? 2b. Between FIFO and LFO, which would result in the higher EPS? 3. Between FIFO and LIFO, which method would result in the lower income tax expense? Assume a 20 percent average tax rate. 4. Between FIFO and LFO, which method would produce the more favorable cash flow? (4) Answer is not complete. Complete this question by entering your answers in the tabs below. \begin{tabular}{|l|l|l|l|l|l|l|} \hline \begin{tabular}{l} Specific \\ Identification \end{tabular} & \multicolumn{3}{|c|}{ Cost of Goods Available for Sale } & \multicolumn{3}{c|}{ Cost of Goods Sold } \\ \hline & \begin{tabular}{l} Number \\ of Units \end{tabular} & \begin{tabular}{c} Cost per \\ Unit \end{tabular} & \begin{tabular}{c} Cost of \\ Goods \\ Avaliable \\ for Sale \end{tabular} & \begin{tabular}{l} Number \\ of Units \\ Sold \end{tabular} & \begin{tabular}{c} Cost \\ per \\ Unit \end{tabular} & \begin{tabular}{c} Cost \\ of \\ Goods \\ Sold \end{tabular} \\ \hline Beginning inventory & & & & & & \\ \hline Purchases: & & & & & & \\ \hline January 12 & & & & & & \\ \hline January 26 & & & & & & \\ \hline Total & & & & & & \\ \hline \end{tabular} Inventory ano the seconu sale was selectea irom the January i