Problem 3 (12 pts.): Inventory and cost of goods sold calculations made under the FIFO and LIFO methods of inventory valuation are presented below for ABC Co. This company has a tax rate of 30%. Ending inventory Cost of goods sold FIFO S118.000 $837.000 $955.000 LIFO $ 55.000 $900.000 $955.000 Use the data above to answer the Following Questions. SHOW YOUR WORK. a) Assuming Sales for the company total $3.000.000, calculate the difference in the amount of Gross Profit ABC Co, would report if it uses FIFO instead of LIFO. LIFO 5. Circle which inventory valuation method would report the higher gross profit referred to in a.) above. How much additional cash would ABC Co. have under LIFO? Why? Does it look like ABC Co. is operating in a period of rising or falling prices? RISING PRICES FALLING PRICES How can you tell? FIFO LIFO Circle the inventory method which would most closely approximate the actual physical flow of goods through most companies Why would most companies' inventory flow in this manner? ISO LIFO Which inventory method would report the most meaningful inventory for the Balance Sheet? Why would this method be more accurate