E7-11 (Algo) Evaluating the Choice among Three Alternative Inventory Methods Based on Income and Cash Flow Effects LO7-2, 7-3 (The following information applies to the questions displayed below.) Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,140 units at $36; purchases, 7,810 units at $38; expenses (excluding income taxes), $193,300; ending inventory per physical count at December 31, current year, 1770 units; sales, 8,180 units; sales price per unit, $80; and average income tax rate, 34 percent. E7-11 Part 2 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 Required information E7-11 (Algo) Evaluating the Choice among Three Alternative Inventory Methods Based on Income and Cash Flow Effects LO7-2, 7-3 The following information applies to the questions displayed below.] Daniel Company uses a periodic inventory system. Data for the current year beginning merchandise inventory (ending inventory December 31, prior year), 2,140 units at $36; purchases, 7,810 units at $38; expenses (excluding income taxes). $193,300; ending inventory per physical count at December 31, current year, 1,770 units, sales, 8,180 units; sales price per unit, $80; and average income tax rate, 34 percent. E7-11 Part 3 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? Net income Income taxes paid (cash flow)