Diaz Company's First Year in Operation Was Year 1

Essay

Diaz Company's first year in operation was Year 1. For Year 1, its cost of goods sold using FIFO was $240,000, and its ending inventory was $58,400. If Diaz had used the LIFO cost flow method, its ending inventory would have been $56,000.
Required:a)What would the cost of goods sold have been with LIFO?b)Based on this information, was Year 1 a period of rising inventory prices or falling inventory prices?