E6.7 (LO 2, 3) Lakshmi Ltd. uses the perpetual inventory system and reports the following inventory transactions for the month of June: Date Explanation Units Unit Cost/Price Total Cost June 1 Beginning inventory 1,500 $5 $ 7,500 12 Purchases 2,300 6 13,800 15 Sales (2,500) 12 16 Purchases 4,500 7 31,500 23 Purchases 1,500 8 12,000 27 Sales (5,700) 15 Instructions a. Determine the cost of goods sold and the cost of the ending inventory using (1) FIFO and (2) average cost. (For average cost, use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.) b. Calculate the gross profit for the month of June using (1) FIFO and (2) average cost. c. Which cost formula results in the higher cost of goods sold? Why? d. Which cost formula results in the higher net income? Why? e. Which cost formula results in the higher ending inventory? Why? f. Which cost formula results in the higher cash flow? Why