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The management of Patel Co. is reevaluating the appropriateness of using its present inventory cost fl ow method, which is average-cost. They request your help in determining the results of operations for 2017 if either the FIFO method or the LIFO method had been used. For 2017, the accounting records show the following data. Operating expenses were $147,000, and the company's income tax rate is 34%. Instructions (a) Prepare comparative income statements for 2017 under FIFO and LIFO. (Show computations of ending inventory.) (b) Answer the following questions for management. (1) Which cost flow method (FIFO or LIFO) produces the more meaningful inventory amount for the balance sheet? Why? (2) Which cost flow method (FIFO or LIFO) produces the more meaningful net income? Why? (3) Which cost flow method (FIFO or LIFO) is more likely to approximate actual physical flow of the goods? Why? (4) How much additional cash will be available for management under LIFO than under FIFO? Why? (5) Will gross profit under the average-cost method be higher or lower than (i) FIFO and (ii) LIFO? (Note: It is not necessary to quantify your answer.) Working Papers Prob 6-4B To get Below - Indicate ONE - either FIFO or LIFO as your answer. (b) (1) ... The FIFO or LIFO method produces the most meaningful inventory amount for the balance sheet because: (b) (3) ... The FIFO or LIFO method is most likely to approximate actual physical flow of the inventory because: (b) (4) There will be. _ additional cash available under LIFO because: (b) (5) Gross profit under the average cost method will be higher than FIFO or LIFO and conversely will be lower than FIFO or LIFO method