1. Picasso's Paints had the following inventory data:

Date		Quantity	Unit Cost
July 1	Beginning inventory	5	$50
July 4	Purchase	10	$53
July 7	Sale	12
July 11	Purchase	9	$59
July 14	Sale	8

Assuming FIFO, what is the cost of goods sold for the July 7 sale?

A.$624

B.$621

C.$600

D.$630

2. Illusion, Inc. had the following inventory data:

Date		Quantity	Unit Cost
July 1	Beginning inventory	5	$55
July 4	Purchase	10	$56
July 7	Sale	12
July 11	Purchase	9	$61
July 14	Sale	8

Assuming LIFO, what is the cost of goods sold for the July 7 sale? (Round your final answer to the nearest dollar.)

A.$672

B.$667

C.$670

D.$668

3. If the ending inventory in Year 1 is understated, gross profit for Year 1 is:

A.overstated.

B.understated.

C.not affected.

D.determined by beginning inventory.