Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? E7-11 (Algo) Evaluating the Choice among Three Alternative Inventory Methods Based on Income and Cash Flow Effects L07-2, 7-3 Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,160 units at $36; purchases, 7,890 units at $38; expenses (excluding income taxes), $194,300; ending inventory per physical count at December 31, current year, 1,700 units; sales, 8,350 units; sales price per unit, \$79; and average income tax rate, 34 percent. Required: 1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? 3. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming that prices were falling? Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Use the COGS amount from Required 1 a. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming that prices were falling? Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount