E7-11 Alternative Inventory Methods Nevens Company uses a periodic inventory system. During November, the fol-lowing transactions occurred:

Date Transaction Units Cost/Unit

November 1 Balance 500 $3.50

8 Sale 350 -

13 Purchase 300 $4.00

21 Purchase 200 $5.00

28 Sale 150 -

Required:

1. Compute the cost of goods sold for November and the inventory at the end of November for each of the fol-lowing cost flow assumptions:

a. FIFO

b. LIFO

c. Average cost

2. Next Level What can you conclude about the effects of the inventory cost flow assumptions on the financial statements?