. The F.L.A.C. Corporation sells a single product. The following is information on inventory, purchase, and sales for the current year: Number of units Unit cost Sale price January 1 Inventory 10,000 $3.00 January 10 Purchase 4,0003.50 January 1-March 31 Sales 8,000 $5.00 April 25 Purchase 10,004.00 April 1-June 30 Sales 11,005.50 July 10 Purchase 6,0004.50 July 1-September 30 Sales 3,0006.00 October 15 Purchase 8,0005.00 Ocotber 1-December 31 Sales 9,0006.50

(a) Compute the inventory balance and the cost of goods sold expense reported at the end of the year using the following methods: FIFO, LIFO, and average cost.

(b) Discuss the effect of each method on the balance sheet and income statement during periods of inflation.