The management of Sheridan Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2020 if either the FIFO or the LIFO method had been used. For 2020, the accounting records show these data: Inventories Beginning (7,000 units) Ending (13,000 units) Purchases and Sales $14,000 Total net sales (184,000 units) $763,600 Total cost of goods purchased (190,000 units) 466,000 Purchases were made quarterly as follows. Quarter Units Unit Cost Total Cost 1 50,000 $2.20 $110,000 2 40,000 2.35 94,000 3 40,000 2.50 100,000 4 60,000 190,000 2.70 162,000 $465,000 Operating expenses were $130,000, and the company's income tax rate is 40%. Your answer is partially correct. Try again. Prepare comparative condensed Income statements for 2020 under FIFO and LIFO. SHERIDAN INC. Condensed Income Statements For the Year Ended December 31, 2020 Sales Revenues Cost of Goods Sold E Beginning Inventory FIFO LIFO 763,600 763,600 14,000 14,000 Q Cost of Goods Purchased 466,000 466,000 Cost of Goods Available for Sale 480,000 480,000 Ending Inventory 35,100 Cost of Goods Sold 444,900 B Gross Profit/ (Loss) 318,700 Operating Expenses 130,000 130,000 Income before Income Taxes 188,700 Income Tax Expense 75,480 Net Income/ (Loss) 113,220 LINK TO TEXT Your answer is partially correct. Try again. Answer the following questions for management. (1) Which cost flow method (FIFO or LIFO) produces the more meaningful inventory amount for the balance sheet? FIFO method (2) Which cost flow method (FIFO or LIFO) produces the more meaningful net income? LIFO method v (3) Which cost flow method (FIFO or LIFO) is more likely to approximate the actual physical flow of goods? FIFO method (4) How much more cash will be available for management under LIFO than under FIFO? (5) Will gross profit under the average-cost method be higher or lower than FIFO? Will gross profit under the average-cost method be higher or lower than LIFO? Lower Higher