Question 3: Suggested time 15 minutes: 15% points:

The following information is available for Flip Company:

Beginning inventory........... 600 units at $4.00

First purchase........... 900 units at $6.00

Second purchase........... 500 units at $7.20

Assume that Flip uses a periodic inventory system and that there are 700 units left at the end of the month.

Instructions: Compute the cost of ending inventory and Cost of Good Sold under the

a. LIFO method.

b. FIFO method.

c. Average-cost method