E7-9 (Algo) Evaluating the Choice among Three Alternative Inventory Methods Based on Cash Flow Effects LO7-2, 7-3

Following is partial information for the income statement of Audio Solutions Company under three different inventory costing methods, assuming the use of a periodic inventory system:

Required:

1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods.

2. Prepare an income statement through pretax income for each method.

Sales, 309 units; unit sales price, $54; Expenses, $1,570

3. Rank the three methods in order of income taxes paid (favorable cash flow).