If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions. Do you agree with this statement? Why or Why not? Justify.

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ii. Pegasus company just starting in business purchased three merchandise inventory items at the following prices. First purchase $85; Second purchase $97; Third purchase $88. If the company sold two units for a total of $250 and used FIFO costing, what will be the cost of goods sold and ending inventory for the period? What will be the gross profit?