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4 E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO L07-2,7-3 (T)e following information applies to the questions displayed below) Emily Company uses a periodic Inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following Information for product 2 Part 1 of a UM 114 2.85 pol Inventory, December 23. prior YAT For the current years Purchase, April 11 Purchase. One Gales (650 each) operating expenses (eelding tax expenses baita 3,020 6.100 7,840 10,970 15 20 $185,500 E7-7 Part 1 Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for ( Case A: FIFO and Case: LIFO Answer is not complete. EMILY COMPANY Income Statement For the Year Ended December 31, current year Care Case FO UFO 548.500 3548 500 Cool of goods som Beginning inventory Purchases OS 5 30.480 291500 30,400 291,500 Goods available for sale Ending inventory 330.980 100.150 330.950 127 230 Cost of goods sold Gross proft Operating expenses 101.000 0 386.070 105.500 200.750 344.750 185.500 ME CE 5 Part 2 of 3 Required Information E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO LO7-2,7-3 The following information applies to the questions displayed below.) Emilly Company uses a periodic Inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following Information for product 2 2.85 points Unte CONE 514 efloor Inventory, December 31, prior year For the current years Purchase. April 11 Purchase, una 1 sales (50 each) Operating expenses (excluding income tax expense) uit 2,020 9,900 7,640 10,970 15 20 $185,500 H Print E7-7 Part 2 References 2. Compute the difference between the pretax income and the ending Inventory amount for the two cases. Comparison of Amounts Casa A Case FIFO LIFO Daffrance Pretax income Ending inventory