The management of Waterway 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 Purchases and Sales Beginning (5,000 units) $20,000 Total net sales (181,000 units) $1,113,150 Ending (14,000 units) Total cost of goods purchased (190,000 units) 846,000 Purchases were made quarterly as follows. Quarter Units Unit Cost Total Cost 1 50,000 $4.20 $210,000 2 40.000 4.35 174,000 3 40,000 450 180.000 4 60.000 4.70 282,000 190.000 5846,000 Ending (14,000 units) Total cost of goods purchased (190,000 units) 846,000 Purchases were made quarterly as follows Quarter Units Unit Cost Total Cost 1 50,000 $4.20 $210,000 2 140,000 4.35 174,000 3 40,000 4.50 180,000 4 60,000 470 282.000 190,000 $846,000 Operating expenses were $125,000, and the company's income tax rate is 40% (a) (a) Prepare comparative condensed income statements for 2020 under FIFO and LIFO. WATERWAY INC. Condensed Income Statements For the Year Ended December 31, 2020 FIFO LIFO Sales Revenues $ 1113150 $ $ > 1113150 > Cost of Goods Sold 20000 20000 > Beginning inventory 846000 846000 Cost of Goods Purchased 866000 866000 Cost of Goods Available for Sale Beginning Inventory 20000 20000 Cost of Goods Purchased 846000 846000 Cost of Goods Available for Sale 866000 866000 Ending Inventory > 65800 65800 Cost of Goods Sold 800200 800200 Gross Proh/(Loss C Operating Expenses V 125000 125000 Tocome before Income Taxes 18795 Income Tax Expense Net Income toss