Income is to be evaluated under four different situations as follows: a. Prices are rising: (1)...

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Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 510 units for $15,300; beginning inventory, 300 units; purchases, 380 units; ending inventory, 170 units; and operating expenses, $4,000. The income tax rate is 40%. Required: 1. Complete the following tabulation for each situation. In Situations A and B (prices rising), assume the following: beginning inventory, 300 units at $12 - $3,600; purchases, 380 units at $14-$5,320. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 300 units at $14-$4,200; purchases, 380 units at $12-$4,560. Use periodic inventory procedures. PRICES RISING PRICES FALLING Situation A Situation B Situation C Situation D FIFO LIFO FIFO LIFO Sales revenue $ 15,300 $ 15,300 $ 15,300 $ 15,300 Cost of goods sold: Beginning inventory 3,600 Purchases 5,320 Goods available for sale 8,920 Ending inventory 2,380 Cost of goods sold 6,540 Gross profit 8,760 Expenses 4,000 4,000 4,000 4,000 Pretax income 4,760 Income tax expense 1,904 Net income $ 2,856 Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 510 units for $15,300; beginning inventory, 300 units; purchases, 380 units; ending inventory, 170 units; and operating expenses, $4,000. The income tax rate is 40%. Required: 1. Complete the following tabulation for each situation. In Situations A and B (prices rising), assume the following: beginning inventory, 300 units at $12 - $3,600; purchases, 380 units at $14-$5,320. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 300 units at $14-$4,200; purchases, 380 units at $12-$4,560. Use periodic inventory procedures. PRICES RISING PRICES FALLING Situation A Situation B Situation C Situation D FIFO LIFO FIFO LIFO Sales revenue $ 15,300 $ 15,300 $ 15,300 $ 15,300 Cost of goods sold: Beginning inventory 3,600 Purchases 5,320 Goods available for sale 8,920 Ending inventory 2,380 Cost of goods sold 6,540 Gross profit 8,760 Expenses 4,000 4,000 4,000 4,000 Pretax income 4,760 Income tax expense 1,904 Net income $ 2,856