P7-3 (Algo) Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow LO7-2, 7-3 Skip to question [The following information applies to the questions displayed below.] At the end of January of the current year, the records of Donner Company showed the following for a particular item that sold at $16.40 per unit: Transactions Units Amount Inventory, January 1 610 $ 2,135 Purchase, January 12 590 3,245 Purchase, January 26 190 1,425 Sale (470) Sale (200)

Between FIFO or LIFO, which method would result in the lower income tax expense? Assume a 30 percent average tax rate. (Round your answer to 2 decimal places.)

Between FIFO or LIFO, which method would produce the more favorable cash flow?