Reporting and Analyzing Inventory () Cambridge Business Publishers a. Construct a projected balance sheet as of the end of December, Year 1. b. Construct financial forecasts of income statements, cash flows (direct method) and balance sheets for the next three years (through Year 4). Assume that your business would operate in a tax jurisdiction that requires the use of FIFO for inventory. Would this opportunity meet your financial objective? c. Suppose that your business would operate in a tax jurisdiction that allowed the use of LIFO for inventory. Would this opportunity meet your financial objective? Why? M7-20. Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost Assume that Gode Company reports the following initial balance and subsequent purchase of inventory. Assume that 4,250 units are sold during the year. Compute the cost of goods sold for the year and the balance reported as ending inventory on its year-end balance sheet under the following inventory costing methods: a. FIFO b. LIFO c. Average cost