1. The Washington Corporation is currently using first-in, first-out (FIFO) method of inventory valuation. The president wants to know the effect of a change in inventory valuation method from first-in, first-out (FIFO) to last-in, first-out (LIFO) method Washington Corporation makes the following information available to you for the year 2016: Sales: 42.000 units @ $100 each Inventory on January 1, 2013: 12,000 units @ S40 each Units purchased on January 15, 2013: 12.000 units @ $44 each Units purchased on June 25, 2013: 20,000 units @ S50 each Units purchased on December 20, 2013: 14,000 units @ $60 each A physical count was made on December 31, 2016 and 16,000 units were found in inventory. The total operating expenses of $400,000 were paid during the year 2016. Required: Prepare a comparative income statement using FIFO and LIFO method for the president of Washington Corporation.

2. The HPL Inc. sold 10,000 units for $240,000 during the year 2013. The total purchases were 12,000 units @ $8 each and the total operating expenses were $25.000 during this period. A periodic costing method is used. Required: 1. Prepare a comparative income statement using FIFO, LIFO and average costing method to show the effect of each on net operating income of HPL Inc. 2. Show the balances of the following items on December 31, 2013 under FIFO, LIFO and average costing method: (i). Inventory (in). Retained earnings (ili). Cash