Shepard Company sold 4,000 units of its product at $100 per unit during the year and incurred operating expenses of $15 per unit in selling the units. It began the year with 840 units in inventory and made successive purchases of its product as follows.

Required
1. Prepare comparative year-end income statements for the three inventory costing methods of FIFO, LIFO, and weighted average.
(Round all amounts to cents.) Include a detailed cost of goods sold section as part of each statement. The company uses a periodic inventory system.
2. How would the financial results from using the three alternative inventory costing methods change if the company had been experiencing decreasing prices in its purchases of inventory?
3. What advantages and disadvantages are offered by using

(a) LIFO 

(b) FIFO? 

Assume the continuing trend of increasing costs.

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Jan. 1 Beginning inventory Apr. 2 Purchase Purchase Purchase June 14 Aug. 29 Nov. 18 Purchase Total..... 840 units @ $58 per unit 600 units @ $59 per unit 1,205 units @ $61 per unit 700 units @ $64 per unit 1,655 units @ $65 per unit 5,000 units