ssignment #7 Ch. 76 5 Saved 10 points Book Hint Print References 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: Inventory, December 31, prior year For the current year! Purchase, April 11 Purchase, June 1 Sales ($50 each) Operating expenses (excluding income tax expense) Required: Units 3,000 Unit Cont $9 9,000 10 7,000 15 10,000 $ 190,000 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. 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. 3. Which inventory costing method may be preferred for income tax purposes? He- Required 1 Required 2 Required 3 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 Cost of goods sold: Goods available for sale Cost of goods sold Income Statement For the Year Ended December 31, current year Case A FIFO Case B LIFO Required 2 > Required 1 Required 2 Required 3 Compute the difference between the pretax income and the ending inventory amount for the two cases. Comparison of Amounts Case A FIFO Pretax income Ending inventory Case B LIFO Difference Required 1 Required 2 Required 3 Which inventory costing method may be preferred for income tax purposes? Which inventory costing method may be preferred for income tax purposes? < Required 2 Required 3