E$7-11($Static$)$ Evaluating the Choice among Three Alternative Inventory Methods Based on Income and Cash Flow Effects LO$7-2,7-3$

Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory $($ending inventory December $31,$ prior year$),2,000$ units at $$38$; purchases, $8,000$ units at $$40$; expenses $($excluding income taxes$),$ $$184,500$; ending inventory per physical count at December $31,$ current year, $1,800$ units; sales, $8,200$ units; sales price per unit, $$75$; and average income tax rate, $20$ 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? E$7-11($Static$)$ Evaluating the Choice among Three Alternative Inventory Methods Based on Income and Cash Flow Effects LO$7-2,7-3$

Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory $($ending inventory December $31,$ prior year$),2,000$ units at $\backslash$$$38$; purchases, $8,000$ units at $\backslash$$$40$; expenses $($excluding income taxes$),\backslash (\backslash$$ $184,500\backslash )$; ending inventory per physical count at December $31,$ current year, $1,800$ units; sales, $8,200$ units; sales price per unit, $\backslash$$$75$; and average income tax rate, $20$ 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?

Complete this question by entering your answers in the tabs below.

Req $1$ a

Req $1$b

Req $2$

Req $3$ Complete this question by entering your answers in the tabs below.

Req $1$a

Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods.

Note: Do not round your intermediate calculations.

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|$l$|\}$

$\backslash$hline $\backslash$multirow$\{2\}\{*\}\{\backslash$multicolumn$\{2\}\{|$c$|\}\{$ Cost of Goods Sold $\}\}$ & $\backslash$multicolumn$\{3\}\{|$c$|\}\{$ Inventory Costing Method $\}\backslash \backslash$

$\backslash$cline $\{2-5\}$ & Units & FIFO & LIFO & Average Cost $\backslash \backslash$

$\backslash$hline Beginning inventory & & & & $\backslash \backslash$

$\backslash$hline Purchases & & & & $\backslash \backslash$

$\backslash$hline Goods available for sale & & & & $\backslash \backslash$

$\backslash$hline Ending inventory & & & & $\backslash \backslash$

$\backslash$hline Cost of goods sold & & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Previous Complete this question by entering your answers in the tabs below.

Req $1$a

Req $1$b

Req $2$

Req $3$

Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods.

Note: Do not round your intermediate calculations. Use the COGS amount from Required $1$a$.$ Complete this question by entering your answers in the tabs below.

Req $1$ a

Req $1$b

Req $2$

Req $3$

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 Complete this question by entering your answers in the tabs below.

Req $2$

Req $3$

Between FIFO and LIFO, which method is preferable in terms of $($a$)$ net income and $(\backslash ($ b $\backslash ))$ income taxes paid $($cash flow$),$ assuming that prices were falling?

Net income

Income taxes paid $($cash flow$)$