Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,120 units at $37; purchases, 7,990 units at $39; expenses (excluding income taxes), $193,100; ending inventory per physical count at December 31, current year, 1,700 units; sales, 8,410 units; sales price per unit, $79; and average income tax rate, 34 percent.

Required 1. Compute cost of goods sold and prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. Round your final answers to nearest whole dollar. Do not round your intermediate calculations.) Inventory Costing Method Cost of Goods Sold Units FIFO LIFO Average Cost Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Average Cost Income Statement FIFO LIFO 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? Net income Income taxes paid 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? en prices are falling, the opposite effect occurs and less favorable cash flow than does produces higher net income