[The following information applies to the questions displayed below.) Daniel Company uses a periodic inventory system. Data for 2015: beginning merchandise inventory (December 31, 2014), 2,020 units at $37; purchases, 7,980 units at $39; expenses (excluding income taxes), $193,300; ending inventory per physical count at December 31, 2015, 1,690; sales, 8,310 units; sales price per unit, $77; and average income tax rate, 32 percent. Required: 1. Compute cost of goods sold and prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. (Do not round your intermediate calculations.) Inventory Costing Method FIFO LIFO Units Average Cost Cost of Goods Sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Income Statement FIFO LIFO Average Cost 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? Net income Income taxes paid 3. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming that prices were falling? produces higher net income When prices are falling, the opposite effect occurs and less favorable cash flow than does