Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,040 units at $38; purchases, 7,940 units at $40; expenses (excluding income taxes), $193,900; ending inventory per physical count at December 31, current year, 1,610 units; sales, 8,370 units; sales price per unit, $77; and average income tax rate, 30 percent. 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)?