E7-7 Analyzing and Interpreting the Financial Statement Effects of FIFO, LIFO. and Weighted Average Cost Scoresby Inc. tracks the number of units purchased and sold throughout each year but annlies inventory costing method at the end of the year, as if it uses a periodic inventory system. Assum its accounting records provided the following information at the end of the annual accountine period, December 31. LO 7-3 Transactions Units Unit Cost 3,000 $ 8 a. Inventory, Beginning For the year: b. Purchase, March 5 c. Purchase, September 19 d. Sale, April 15 (sold for $29 per unit) e. Sale, October 31 (sold for $31 per unit) f. Operating expenses (excluding income tax expense), $250,000 9,500 5,000 4,000 8,000 11 Required: Calculate the number and cost of goods available for sale. 1. Calculate the number of units in ending inventory. 1 Compute the cost of ending inventory and cost of goods soid under (a) FIFO, (b) LIFO, and (c) weighted average cost. 4. Prepare an income statement that shows the FIFO method in one column, the LIFO method in another column, and the weighted average method in a final column. Include the follow- ing line items in the income statement: Sales, Cost of Goods Sold, Gross Profit, Operating Expenses, and Income from Operations. 5. Compare the Income from Operations and the ending inventory amounts that would be reported under the three methods. Explain the similarities and differences. A Which inventory costing method minimizes income taxes