Following is partial information for the income statement of Arturo Technologies Company under three different inventory costing methods, assuming the use of a periodic inventory system:

Required:
1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods.
2. Prepare an income statement through pretax income for each method.
3. Rank the three methods in order of preference based on income taxes paid (favorable cash flow) and explain the basis for your ranking.

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FIFO LIFO verage Cost Cost of goods sold Beginning inventory (400 units S30)$12.000 S12,000 Purchases (400 units @$20) $12,000 8,000 8.0008,000 Goods available for sale Ending inventory (500 units Cost of goods sold Sales, 300 units; unit sales price, $50 Expenses, $2,500