Sales revenue PRICES RISING PRICES FALLING Situation A Situation B Situation C Situation D FIFO LIFO FIFO LIFO 20,800 $ 20,800 20,800 $ 20,800 Cost of goods sold: Beginning inventory 3,720 Purchases 5,880 Goods available for sale 9,600 Ending inventory 2,940 Cost of goods sold 6,660 Gross profit 14,140 Expenses 3,800 3,800 3,800 3,800 Pretax income 10,340 Income tax expense 3,102 Net income $ 7,238