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P7.3 (Static) Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow LO7-2, 7-3 At the end of January of the current year, the records of Donner Company showod the following for a particular item that sold at $16 perunit: Required: Required: 1. Assuming the use of o poriodic inventory system, compute Cost of Goods Sold under each method of inventory average cost, FIFO, LFO, and specific lidentification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selocted from the January 12 purchase. 16. Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory (a) average cost, (b) FFO, (c) LIFO, and (d) specific identification. For specific idemification, assume that the first sale was selocted from the beginning inventory and the second sale was selected from the January 12 purchase. 2a. Between FIFO and UFO, which method would result in the higher pretaxinconte? 2b. Between FFO and LIFO, which would result in the higher EPS? 3. Between FIFO and LIFO, which mothod would result in the lower income tax expense? Assume a 20 percent average tax rate. 4. Eetween FFO and LIFO, which method would produce the more favorable cash flow? Complete this question by entering your answers in the tabs below. Between FIFO and LIFO, which method would result in the lower income tax expense? Assume a 20 percent average tax rate. Between FIFO and LiFO, which method would produce the more favorable cash flow? Complete this question by entering your answers in the tabs below. Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (c) UFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase

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