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Emily Company uses a periodic inventory system. At the end of the annual accounting period,...

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Accounting

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
Inventory, December 31, prior year 2,890 $ 12
For the current year:
Purchase, April 11 8,860 13
Purchase, June 1 7,930 18
Sales ($55 each) 10,860
Operating expenses (excluding income tax expense) $ 191,500

2. Compute the difference between the pretax income and the ending inventory amount for the two cases.

Comparison of Amounts
Case A Case B
FIFO LIFO Difference
Pretax income
Ending inventory

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