Refer to the information in Demonstration Problem 1 to answer the following requirements.

Required 1. Calculate the cost of goods available for sale.

2. Apply the four different methods of inventory costing (FIFO, LIFO, weighted average, and specific identification) to calculate ending inventory and cost of goods sold under each method using the periodic system.

3. Compute gross profit earned by the company for each of the four costing methods in part 2. Also, report the inventory amount reported on the balance sheet for each of the four methods.

4. In preparing financial statements for year 2013, the financial officer was instructed to use FIFO but failed to do so and instead computed cost of goods sold according to LIFO. Determine the impact of the error on year 2013’s income. Also determine the effect of this error on year 2014’s income. Assume no income taxes.