Gill Inc. is trying to determine whether to use the FIFO or average cost formula. The accounting records show the following selected inventory information:

The company accountant has prepared the following partial income statement to help management understand the financial statement impact of each cost formula.

Instructions
(a) Fill in the missing amounts [1] to [8] in the perpetual inventory schedule shown above, assuming the use of the FIFO cost formula.
(b) Fill in the missing amounts [1] to [8] in the perpetual inventory schedule shown above, assuming the use of the average cost formula. (Round the average unit cost to the nearest cent.)
(c) Fill in the missing information in the blanks shown in the income statements above
(d) Explain whether the comparative profits of each cost formula determined in (b) will be expected to increase, decrease, or not change if (1) costs fall, and (2) costs remain stable.
(e) Identify the advantages of each cost formula.

Purchases Cost of Goods Sold Balance Date Units CostTotaUnits Cost TotaUnitsCostTotal Apr. 7,000 8 9 18,000 10 180,000 14 56,000 7,000 $8$56,000 13] 1] 2] 20,000 [4) FIFO $484,000 Average $484,000 Sales Cost of goods sold Gross profit Operating expenses Profit before income tax Income tax expense (30%) Profit 100,000 100,000