E7-9 Evaluating the Choice among Three Alternative InventoryMethods Based on Cash Flow Effects LO7-2, 7-3

Following is partial information for the income statement ofAudio Solutions Company under three different inventory costingmethods, 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. (Do notround intermediate calculations.)

COGS

Beg inventory (400 units @ $28)

Purchases (475 units @35)

Goods available

ending inventory (525)

COGS

2. Prepare an income statement through pretaxincome for each method.

   Sales, 350 units; unit sales price, $50;Expenses, $1,700

NEED HELP PREPARING INCOME STATEMENT

3. Rank the three methods in order of incometaxes paid (favorable cash flow).