P7-4 (Algo) Analyzing and Interpreting Income Manipulation Under the LIFO Inventory Method LO7-2, 7-3

1) Req 3A Pretax income (Increase or decrease) by ______

2) Req 3B Assuming that the unit cost of test equipment is expected to continue to decline during the following year, is there any evidence of income manipulation?

Is there any evidence of income manipulation? __________

Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year, the inventory records reflected the following: Beginning inventory Purchases Sales (49 units at $24,670 each) Units 21 43 Unit Cost $11,560 10,060 Total Cost $ 242,760 432,580 Inventory is valued at cost using the LIFO inventory method. P7-4 Part 3 3a. How much did pretax income change because of the decision on December 31, current year? 3b. Assuming that the unit cost of test equipment is expected to continue to decline during the following year, is there any evidence of income manipulation? Complete this question by entering your answers in the tabs below. Req Req 3B How much did pretax income change because of the decision on December 31, current year? Pretax income by