Exercise 8-16 You are the vice president of finance of Headland Corporation, a retail company that prepared two different schedules of gross margin for the first quarter ended March 31, 2017. These schedules appear below. Sales Cost of Gross Margin ($5 per unit) Goods Sold Schedule 1 $157,200 $132,806 $24,394 Schedule 2 157,200 138,078 19,122 The computation of cost of goods sold in each schedule is based on the following data. Cost Total Cost Units per Unit Beginning inventory, January 1 10,550 $4.10 $43,255 Purchase, January 10 8,550 4.20 35,910 Purchase, January 30 6,550 4.30 28,165 Purchase, February 11 9,550 4.40 42,020 Purchase, March 17 11,550 4.50 51,975 MRIELVERSION 1BACK Jane Torville, the president of the corporation, cannot understand how two different gross margins can be computed from the same set of data. As the vice president of finance, you have explained to Ms. Torville that the two schedules are based on different assumptions concerning the flow of inventory costs, Le, FIFO and LIFO. Schedules 1 and 2 were not necessarily prepared in this sequence of cost flow assumptions. NEXT Prepare two separate schedules computing cost of goods sold and supporting schedules showing the composition of the ending inventory under both cost flow assumptions. Headland Corporation Schedules of Cost of Goods Sold For the First Quarter Ended March 31, 2017 Schedule 1 First-in, First-out Last-in, First-out Schedule 2 Schedules Computing Ending Inventory First-in, First-out (Schedule 1) at %$4 %3D at %3D Last-in, First-out (Schedule 2) at $4 %3D at Click if you would like to Show Work for this question: Op %24 %24 %24 %24 %24 %24 %24