Required information P7-5 (Algo) Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling LO7-2, 7-3 [The following information applies to the questions displayed below.] Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 506 units for $17,710; beginning inventory, 293 units; purchases, 388 units; ending inventory, 175 units; and operating expenses, $3,100. The income tax rate is 40%. P7-5 Part 1 Required: 1. Complete the following tabulation for each situation in Situations A and B (prices rising), assume the following: beginning inventory, 293 units at $10 = $2,930; purchases, 388 units at $11 = $4,268. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 293 units at $11 = $3,223; purchases, 388 units at $10 = $3,880.Use periodic inventory procedures. (Round your answers to nearest dollar amount.) PRICES RISING PRICES FALLING Situation A Situation B Situation C Situation D FIFO LIFO FIFO LIFO Sales revenue $ 17,710 $ 17,710 $ 17,710 $ 17,710 Cost of goods sold: Beginning inventory 2,930 Purchases 4,268 Goods available for sale 7,198 Ending inventory 1,925 Cost of goods sold 5,273 Gross profit 12,437 Expenses 3,100 3,100 3,100 3,100 Pretax income 9,337 Income tax expense 3,735 Net income $ 5,602