Comparing inventory Methods Assume that a firm separately determined inventocy under FiFO and Lifo and then cormpared the results. a. In each dropdown that follows, select the correct wign [iess than (), or equal {=) ) for each comparison, assuming periods of rising prices, b. Why wnuld marmogenent preter to use liso over firo in periods of rining prices? 1. The inceere shown on the company is tax retum would pe lower if Lfo rather than Firo were used, thus, there is a tax advantage of using LFO. 2. The inventory value wevid be lower if LFo rather than Flfo were used; thus, there is a tax advantage of using Liro. 3. The income shown on the campany's tax meturn would be higher if LFO rather than fIFO were used is thus giving a better dividead to the sharehotders. Comparing Inventory Methods Assume that a firm separately determined inventory under FIFO and L1FO and then compared the results. a. In each dropdown that follows, select the correct sign [less than (), or equal (=) ] for each comparison, assuming periods of rising price: b. Why would management prefer to use LFO over FIFO in periods of rising prices? 1. The income shown on the company's tax return would be lower if LFO rather than FIFO were used; thus, there is a tax advantage of using UFO. 2. The inventory value would be lower if LIFO rather than FIFO were used; thus, there is a tax advantage of using LIFO. 3. The income shown on the company's tax return would be higher if LiFO rather than FiFo were used; thus giving a better dividend to the shareholders