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), 2,050 units at $35; purchases, 7,990 units at $37; expenses (excluding income taxes), $193,900; ending inventory per physical count at December 31, current year, 1,660 units; sales, 8,380 units; sales price per unit, $79; and average income tax rate, 32 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