QP Corp. sold 4,000 units of its product at $50 per unit during the year and incurred operating expenses of $5 per unit in selling the units. It began the year with 700 units in inventory and made successive purchases of its product as follows.

Required
1. Prepare comparative year-end income statements for the three inventory costing methods of FIFO, LIFO, and weighted average. (Round all amounts to cents.) Include a detailed cost of goods sold section as part of each statement. The company uses a periodic inventory system.
2. How would the financial results from using the three alternative inventory costing methods change if the company had been experiencing declining costs in its purchases of inventory?
3. What advantages and disadvantages are offered by using

(a) LIFO

(b) FIFO? Assume the continuing trend of increasing costs.

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Jan. 1 Feb. 20 May 16 Oct. 3 Dec. 11 Beginning inventory Purchase Purchase Purchase. Purchase Total 700 units @ $18 per unit 1,700 units @ $19 per unit 800 units @ $20 per unit 500 units @ $21 per unit 2,300 units @ $22 per unit 6,000 units