Gazin Inc. was in business for four years. The following table shows its purchases and sales during that four-year period.

	Purchases Units	Purchases Unit Costs	Sales Units	Sales Unit Costs
Year 1	12,000	$10	9,000	$15
Year 2	11,000	$11	10,000	$17
Year 3	10,000	$12	11,000	$19
Year 4	9,000	$13	12,000	$21
TOTALS	42,000		42,000

Note: In order to calculate income you need to calculate cost of goods sold

REQUIRED:

1. Compute income for each of the four years assuming FIFO cost flow.
2. Compute income for each of the four years assuming LIFO cost flow.
3. Compare total income over the four-year period. Does the cost flow assumption matter?