P7-3 Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow LO7-2, 7-3 [The following information applies to the questions displayed below.) At the end of January of the current year, the records of Donner Company showed the following for a particular item that sold at $16 per unit: Transactions Inventory, January 1, Purchase, January 12 Purchase, January 26 Sale Sale Units 500 600 160 (370) (250) Amount $2.365 3,600 1,280 References Section Break P7-3 Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow LO7-2, 7-3 Required: 1a. Assuming the use of a periodic inventory system, compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. (Round unit price to 2 decimal places. Input all amounts as positive values.) Average Cost Cost of Good Available for Sale Cost of Goods Sold # of Units Cost per Unit Cost of Goods Available for Sale # of Units Sold Cost per Unit Cost of Goods Sold Beginning inventory 500 $ 2,365 Purchases: 600 $ 3,600 January 12 January 26 Total 160 $ 5,600 1,260 $ 11,565 620 $ 0 1b. Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (C) LIFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. DONNER COMPANY Partial Income Statement For the Month Ended January 31, Current Year (a) (b) (c) (d) Average Cost FIFO LIFO Specific Identification $ 9,920 $ 9,920 $ 9,920 $ 9,920 $ 5,691 $ 3,085 $ 8,360 $ 3,250 $ 4,229 $ 6,836 $ 1,560 $ 6,670 Sales revenue Cost of goods sold Gross profit