The following comparative information is available for Public Company for 2010.

Instructions
(a) Determine net income under each approach. Assume a 30% tax rate.
(b) Determine net cash provided by operating activities under each approach. Assume that all sales were on a cash basis and that income taxes and operating expenses, other than depreciation, were on a cash basis.
(c) Calculate the quality of earnings ratio under each approach and explain yourfindings.

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Sales Cost of goods sold Operating expenses LIFO $83,000 38,000 FIFO $83,000 29,000 (including depreciation) Depreciation Cash paid for inventory purchases 27,000 10,000 34,000 27,000 10,000 34,000