. [Inventory methods, basic relationships] The M & J Co. begins operations on January 1, 1970, with the following balance sheet: Cash Common stock $10,000 During the year, the company maintains its inventory accounts on the FIFO basis. Before provision for income tax, the balance sheet at December 31, 1980, is: cock Cash Inventory $ 5,000 10,000 $15,000 Common stock Pretax income $10,000 5,000 $15,000 M & J has sales in 1980 of $25,000. On a unit basis, the company sells half of the units purchased during the year. Operating expenses (excluding COGS) are $12,000. Prior to issuing financial statements, the company considers its choice of inventory method. Assume a tax rate of 40% and a dividend payout ratio of 50%. A. Using the information provided, complete the following table: FIFO Weighted Average LIFO $25,000 $25,000 $25,000 12,000 12,000 12,000 Sales Cost of goods sold Other expenses Pretax income Income tax expense Net income Retained earnings Cash from operations Closing cash balance Closing inventory Inventory purchases 10,000 B. Prepare a balance sheet for M & J at December 31, 1980, assuming use of: (i) The LIFO inventory method. (ii) The weighted average method. (iii) The FIFO inventory method. C. Discuss the advantages and disadvantages of each of the three possible choices of inventory method. . [Inventory methods, basic relationships] The M & J Co. begins operations on January 1, 1970, with the following balance sheet: Cash Common stock $10,000 During the year, the company maintains its inventory accounts on the FIFO basis. Before provision for income tax, the balance sheet at December 31, 1980, is: cock Cash Inventory $ 5,000 10,000 $15,000 Common stock Pretax income $10,000 5,000 $15,000 M & J has sales in 1980 of $25,000. On a unit basis, the company sells half of the units purchased during the year. Operating expenses (excluding COGS) are $12,000. Prior to issuing financial statements, the company considers its choice of inventory method. Assume a tax rate of 40% and a dividend payout ratio of 50%. A. Using the information provided, complete the following table: FIFO Weighted Average LIFO $25,000 $25,000 $25,000 12,000 12,000 12,000 Sales Cost of goods sold Other expenses Pretax income Income tax expense Net income Retained earnings Cash from operations Closing cash balance Closing inventory Inventory purchases 10,000 B. Prepare a balance sheet for M & J at December 31, 1980, assuming use of: (i) The LIFO inventory method. (ii) The weighted average method. (iii) The FIFO inventory method. C. Discuss the advantages and disadvantages of each of the three possible choices of inventory method