eeriding inventory. Explain the basis for your treae preceding items. (Hint: Set up three columns: item, amount, and explanation.) P7-2 Evaluating Three Alternative Inventoru Methods Based on Net Earnings and Cash Flow At the end of January 2018, the records of Regina Company showed the following for a particular item that sold at $18 per unit: Transaction Inventory, January 1, 2018 Sale, January 10 Purchase, January 12 Sale, January 17 Purchase, January 26 Amount Units 500 (400) 600 (300) 160 $2,500 3,600 1,280 Required: 1. Assuming the use of a perpetual inventory system, prepare a summarized statement through gr profit on sales under each of the following inventory costing methods: (a) weighted-average co (b) FIFO, and (c) specific identification, assuming that the company is permitted to use this met For specific identification, assume that the first sale was out of the beginning inventory and the second sale was out of the January 12 purchase. Show the inventory computations in detail. 2. Which method would result in a. the highest pretax earnings? b. the lowest income tax expense? C. the most favourable cash flow? Explain to record the transactions that occurred in January 2018, assuming t 3. Prepare journal entries FIFO is used for inventory costing