P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling LO7-2,7-3 The following information applies to the questions displayed below. Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used The basic data common to all four situations are: sales, 503 units for $19,114; beginning inventory, 284 units; purchases, 393 units; ending inventory, 174 units; and operating expenses, $3,200. The income tax rate is 40%. Required 1. Complete the following tabulation for each situation in Situations A and B (prices rising), assume the following: beginning inventory, 284 units at $11 = $3,124; purchases, 393 units at $12 = $4,716. In Situations C and D (prices falling), assume the opposite, that is, beginning inventory, 284 units at $12-$3,408, purchases, 393 units at $11-S4,323.Use periodic inventory procedures. (Round your answers to nearest dollar amount.) PRICES RISING PRICES FALLING Situation ASituation B Situation C Situation D FIFO LIFO FIFO LIFO Sales revenue Cost of goods sold Beginning inventory S 19,114 19,114 19,114$19,114 Goods available for sale Ending inventory Cost of goods sold Gross proft Expenses Pretax income Income tax expense Net income 3,124 4,716 7,840 2,088 5,752 13,362 3,200 10,162 4,065 6,097 3,200 3,200 3,200