The management of National Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2017, the accounting records show these data.

Inventory, January 1 (10,000 units)

$35,000Cost of120,000 units purchased

468,500Selling price of98,000 units sold

750,000Operating expenses

124,000

Units purchased consisted of35,000units at $3.70on May 10;60,000units at $3.90on August 15; and25,000units at $4.20on November 20. Income taxes are28%.

(a) Prepare comparative condensed income statements for 2017 under FIFO and LIFO.