[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, 513 units for $16,416; beginning inventory, 298 units; purchases, 396 units; ending inventory, 181 units; and operating expenses, $3,800. The income tax rate is 30%.

Required:

1. Complete the following tabulation for each situation in Situations A and B (prices rising), assume the following: beginning inventory, 298 units at $9 = $2,682; purchases, 396 units at $10 = $3,960. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 298 units at $10 = $2,980; purchases, 396 units at $9 = $3,564.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	$16,416	$16,416	$16,416	$16,416
Cost of goods sold:
Beginning inventory	2,682	?	?	?
Purchases	3,960	?	?	?
Goods available for sale	6,642	?	?	?
Ending inventory	1,810	?	?	?
Cost of goods sold	4,832	?	?	?
Gross profit	11,584	?	?	?
Expenses	3,800	3,800	3,800	3,800
Pretax income	7,784	?	?	?
Income tax expense	2,335	?	?	?
Net income	$5,449	?	?	?

complete sentence

When prices are rising,	?	gives a higher net income than	?
When prices are falling	?	effect results.	?

Complete the following sentence:

The relative effects on the cash position for each situation.

When prices are rising,			?	derives a more favorable cash position
(than	?	)	?	the difference in income tax.