1Given the following data, fill in the table FOR JANUARY using the three cost flow assumptions given. That is, indicate the COST of ending inventory that will appear on the Balance Sheet and the COST of goods sold expense that will appear on the Income Statement.

Date	Units	Cost per unit	Total cost
1/1 beginning inventory	40	$10	$400
1/10 purchase of inventory	20	$20	$400
1/15 purchase of inventory	20	$22	$440
Available for sale	80		$1,240
Ending inventory	20

Number of units sold is 60 in January (80 20 ending inventory)

	FIFO	LIFO	Average Cost
Cost of Ending Inventory
Cost of Goods Sold

1b) If the sales price is $50 per unit, calculate the Gross Profit FOR JANUARY as well under each of the three cost flow assumptions.

	FIFO	LIFO	Average Cost
Sales Revenue (60 units * $50)	$3,000	$3,000	$3,000
Cost of Goods Sold
Gross Profit

2a) What if at the end of the year one of the companies supplies offers to sell them 30 more units at a price of $20 each? How does that change your calculations of ending inventory and cost of goods sold under each method if you DO purchase the 30 units at $20 each?

Date	Units	Cost per unit	Total cost
1/1 beginning inventory	40	$10	$400
1/10 purchase of inventory	20	$20	$400
1/15 purchase of inventory	20	$22	$440
1/31 purchase of inventory	30	$20	$600
Available for sale	110		$1,840
Ending inventory	50

Number of units sold is 60 in January (110 50 ending inventory)

	FIFO	LIFO	Average Cost
Cost of Ending Inventory
Cost of Goods Sold

Did the cost of goods sold change under the FIFO cost method from this additional purchase of 30 units that are sitting in inventory?

Did the cost of goods sold change under the LIFO cost method from this additional purchase of 30 units that are sitting in inventory?

Did the cost of goods sold change under the average cost method from this additional purchase of 30 units that are sitting in inventory?