Kaleta Company reports the following for the month of June:

Unit Unit Cost Total inventory

June 1 Inventory 200 $5 $1000

12th Purchase 400 $6 $2,400

23rd Purchase 400 $7 $2,800

The June 30th ending inventory consisted of 100 units

(a) Determine the cost of goods available for sale.

(b) Determine (1) the cost of the ending inventory, and (2) the cost of goods sold under

each of the assumed cost flow methods (FIFO, LIFO, and average). Prove the

accuracy of the cost of goods sold under each method.

(c) (1) Which cost flow method results in the highest inventory cost amount for the

balance sheet? Why? (2) Which cost flow method results in the highest cost of goods sold for the income statement? Why? (3) Why is the average unit cost not $6?