Prepare income statements using FIFO and LIFO, also determine the amount of income tax that Moonwalk Co. would pay using each cost flow method.

Project Description: The following information pertains to the inventory of Moonwalk Co. during Year 2. January 1 Beginning inventory 400 units @ $30 April 1 Purchased 2,000 units @ $35 October 1 Purchased 600 units @ $38 In Year 2, Moonwalk Co. sold 2,700 units of inventory at $90 per unit and incurred $41,500 of operating expenses. Moonwalk Co. currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 30 % income tax rate. Moonwalk Co. started the period with cash of $75,000, inventory of $12,000, common stock of $50,000, and retained earnings of $37,000