Required information (The following information applies to the questions displayed below.) Emily Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Units Unit Cost $13 2,860 Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($50 each) Operating expenses (excluding income tax expense) 8,840 7,810 10,890 14 19 $185,500 Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. EMILY COMPANY Income Statement For the Year Ended December 31, current year Case A Case B FIFO LIFO Cost of goods sold: Goods available for sale 0 0 Cost of goods sold 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. Comparison of Amounts Case A Case B FIFO LIFO Difference Pretax income Ending inventory 3. Which inventory costing method may be preferred for income tax purposes? - Which inventory costing method may be preferred for income tax purposes