Problem II: (12 pts) Assuming inventory costs are rising over time and new inventory layers are being added, indicate using a checkmark () whether, if applicable, the LIFO or FIFO method would give the desired effect for the pattern described in a given year. If the inventory costing method does not affect the pattern described, select no effect. Only one checkmark should be shown per row.

	All else being equal, when inventory costs are rising, which method would yield...	FIFO	LIFO	No Effect
a.	Lowest inventory balance
b.	Highest income tax expense
c.	Lowest net income
d.	Highest bad debts expense
e.	Highest cost of goods sold
f.	Highest gross margin