Separating operating margin from holding gains. On January 1, the merchandise inventory of Giles Computer Store comprised 200 units acquired for \(\$ 300\) each. During the year, the firm acquired 2,500 additional units at an average price of \(\$ 400\) each and sold 2,300 units for \(\$ 800\) each. The replacement cost of these units at the time they were sold averaged \(\$ 400\) during the year. The replacement cost of units on December 31 was \(\$ 500\) per unit.

a. Calculate cost of goods sold under both FIFO and LIFO cost flow assumptions.

b. Prepare partial income statements showing gross margin on sales as revenues less cost of goods sold under both FIFO and LIFO cost flow assumptions.

c. Prepare partial income statements, separating the gross margin on sales into operating margins and realized holding gains, under both FIFO and LIFO.

d. Append to the bottom of the statements prepared in part \(\mathbf{c}\) a statement showing the amount of unrealized holding gains and the total of realized income plus unrealized holding gains.

e. If you did the previous steps correctly, the totals in part \(\mathbf{d}\) are the same for both FIFO and LIFO. Is this equality a coincidence? Why or why not?