[The following information applies to the questions displayed below.] Income is to be evaluated under four different situations as follows:

a. Prices are rising:

(1) Situation A: FIFO is used.

(2) Situation B: LIFO is used.

b. Prices are falling:

(1) Situation C: FIFO is used.

(2) Situation D: LIFO is used.

The basic data common to all four situations are: sales, 513 units for $16,416; beginning inventory, 298 units; purchases, 396 units; ending inventory, 181 units; and operating expenses, $3,800. The income tax rate is 30%.

Required:

1. Complete the following tabulation for each situation in Situations A and B (prices rising), assume the following: beginning inventory, 298 units at $9 = $2,682; purchases, 396 units at $10 = $3,960. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 298 units at $10 = $2,980; purchases, 396 units at $9 = $3,564.Use periodic inventory procedures.(Round your answers to nearest dollar amount.)

PRICES RISING PRICES FALLING Situation A Situation B Situation C Situation D FIFO LIFO FIFO LIFO Sales revenue $16,416 $16,416 $16,416 $16,416 Cost of goods sold: Beginning inventory 2,682 ? ? ? Purchases 3,960 ? ? ? Goods available for sale 6,642 ? ? ? Ending inventory 1,810 ? ? ? Cost of goods sold 4,832 ? ? ? Gross profit 11,584 ? ? ? Expenses 3,800 3,800 3,800 3,800 Pretax income 7,784 ? ? ? Income tax expense 2,335 ? ? ? Net income $5,449 ? ? ?

	complete sentence
	When prices are rising, ? gives a higher net income than ? When prices are falling ? effect results. ?
	Complete the following sentence: The relative effects on the cash position for each situation.
	When prices are rising, ? derives a more favorable cash position (than ? ) ? the difference in income tax.