1. [Allocation of purchase costs under different inventory methods; (FA adapted] Assume the following: Quarter Units Purchased Per Unit Cost Dollar Purchases Unit Sales | 200 $22 $ 4,400 200 II 300 24 7,200 200 111 300 26 7,800 200 IV 200 1,000 28 5,600 200 $25,000 800 Year Inventory at beginning of Quarter | 400 units at $20 per unit = $ 8,000 Inventory at end of Quarter IV 600 units

a. Calculate reported inventory at the end of the year under euch of the following inventory methods. (i) FIFO (ii) LIFO (iii) Average cost

b. Calculate the cost of goods sold for the year under each method listed in part

a. c. Discuss the effect of the differences among the three meth- ods on: (i) Reported income for the year (ii) Stockholders' equity at the end of the year