Exercise 8–1: FIFO and LIFO Inventory(Study the FIFO and LIFO explanations in the chapter).

a1. Use the format in Exhibit 8–1 below to compute the ending FIFO inventory and the cost of goods sold, assuming $90,000 in sales; beginning inventory 500 units @ $50; purchases of 400 units @ $50; 100 units @ $65; 400 units @ $80.

a2. Also compute the cost of goods sold percentage of sales.

b1. Use the format in Exhibit 8–2 below to compute the ending LIFO inventory and the cost of goods sold, using same assumptions.

b2. Also compute the cost of goods sold percentage of sales.

c. Comment on the difference in outcomes.