Alta Ski Company?s inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system.

Required:1. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021? Why? Which method will result in the highest ending inventory balance? Why?2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.3. Now assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $70, and the inventory purchased on January 21 had a unit cost of $65. All other information is the same. Repeat requirements 1 and 2.

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Beginning inventory, January 1, 2021 Purchases: 600 units @ $80 each 1,000 units @ $95 each January 15 January 21 Sales: January 5 January 22 January 29 Ending inventory, January 31, 2021 800 units @ $100 each 400 units @ $120 each 800 units @ $130 each 400 units @ $135 each 800 units