Financial accounting analysis exercise find the solution for better understanding 2-2

2. Irene Company began operations on Jan 1, 2018 and uses the average cost method (AC) in costing its inventory. Irene is contemplating a change to the FIFO method. Accordingly, the following information has been developed: 2018 2019 Ending Inventory AC $450 $765 FIFO 480 810 Condensed I/S for Irene, prepared under AC inventory method, for 2018 and 2019 appear below: 2018 2019 Sales $3,000 $3,600 CGS 1,800 2,160 GP $1,200 $1,440 SG&A 750 825 NI $ 450 $ 615 Required: Calculate CGS for each year under FIFO Prepare the condensed I/S for Irene under FIFO for 2018 and 2019 Explain the difference between the 2018 NI's under AC and FIFO and the difference between the 2019 NI's under AC and FIFO