Use the data in Exercise 6-3 to prepare comparative income statements for the month of January for Park Company similar to those shown in Exhibit 6.8 for the four inventory methods. Assume expenses are $1,600, and that the applicable income tax rate is 30%.
1. Which method yields the highest net income?
2. Does net income using weighted average fall between that using FIFO and LIFO?
3. If costs were rising instead of falling, which method would yield the highest net income?