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.) 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: Units Unit Cost $12 2,870 Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($54 each) Operating expenses (excluding income tax expense) 8,810 7,940 10,950 13 18 $ 187,500 E7-7 Part 1 Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. EMILY COMPANY Income Statement For the Year Ended December 31, current year Case A FIFO Case B LIFO $ 591,300 Sales revenue Cost of goods sold: Beginning inventory Purchases $ 34,440 34,440 257,450 257,450 Goods available for sale 291,890 291,890 Ending inventory Cost of goods sold Gross profit Operating expenses