HERE IS THE ASSIGNMENT: If you could answer preferably question 1,5,6 that would be great(ill provide you with the link to the answer key but it doesnt answer 1,5,6)--- i wil provide you with what i think those answers are (please tell me if i am right/ if not how to do it.

5.If prices are increasing, then using FIFO method the cost of goods sold will be lower using the LIFO method.

So where the cost of goods sold is lower the profits will be higher.

So using FIFO methods profits will be higher when prices are increasing

1.Number of Units sold:

Forumula : Beginning inventory + purchases ending inventory = # of units sold

3+ 2- 1= 4 units sold

6.If prices are rising, that means last purchase will be at higher cost so if last purchase is left as inventory it will create higher inventory cost in the balance sheet, which means if we use the FIFO method- the cost of goods sold will be lower and this will lead to higher inventory costs on the balance sheet

https://accountingintheheadlines.com/2016/10/11/how-could-the-different-inventory-costing-methods-used-by-best-buy-amazon-and-target-impact-their-respective-income-statements-and-balance-sheets/

How could the different inventory costing methods used by Best Buy, Amazon, and Target impact their respective income statements and balance sheets?

Three retailing giants, Best Buy Co., Inc. (NYSE: BBY), Amazon.com, Inc., (NASDAQ: AMZN), and Target Corporation (NYSE: TGT) each use a different inventory costing method. Best Buy uses weighted-average cost, Amazon uses FIFO, and Target uses LIFO.

Here is a hypothetical example that highlights the potential differences in income statements and balance sheets that could arise simply because of the use of a different inventory costing method.

Basic facts

Assume that all three retailers sell a popular shirt that retails for $32. To compare the impact of inventory costing method, we will also assume that all three retailers have the following inventory and sales data for the same period. To keep the calculations simple, a unit represents one million shirts.

Beginning inventory: 3 units @ $10.00

Purchases: 2 units @ $15.00

Ending inventory: 1 unit

Questions

1. Calculate the number of units sold.

2. Calculate cost of goods sold, cost of ending inventory, and gross margin for Best Buy using the weighted-average inventory costing method.

3. Calculate cost of goods sold, cost of ending inventory, and gross margin for Amazon using the FIFO inventory costing method.

4. Calculate cost of goods sold, cost of ending inventory, and gross margin for Target using the LIFO inventory costing method.

5. If prices are decreasing, would FIFO or LIFO produce the highest income? Explain.

6. Would FIFO or LIFO produce the highest inventory cost on the balance sheet if prices are rising? Explain.