Merrimack Tractors and Mowers: LIFO & FIFO?

Description

You must read the case first, and after that, you need to answer the following four questions:

1. Using LIFO, prepare a pro-forma income statement for 2008 assuming that the company sells 7,500 units each quarter at a price of $2,000 per unit with Sales General and Administration costs the same as for 2007.
2. How would this change if the unit sales pattern was 7,500, 2,500, 17,500, 2,500 units in the four quarters? Why? (Please, show the calculations and compare the financial statements).
3. Assuming 7,500 units of sales per quarter, what are the effects of using FIFO on the financial statements? (Please, show the calculations and compare the financial statements).
4. Is James Colburn suggesting to Rick Martino that they should be managing earnings rather than managing the company and its business? Although such changes are clearly permitted by the law, do you consider them to be ethical?