Required:

1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO.

2. Compute the difference between the pretax income and the ending inventory amount for the two cases.

3. Which inventory costing method may be preferred for income tax purposes?

-	FIFO
-	LIFO

The following infomation applies to the questions disolayed belowJ Broachead Company uses a penodic Inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: It Cost S 11 Units Inventory, December 31, prior year For the current year 2,900 Purchase, April 11 Purchase, June 1 Sales ($58 each) Operating expenses (excluding Income tax expensel 8.900 9 $194,000 S194000 10,940 1