Titans, Inc uses a periodic inventory system. One of the store'smost popular products is a nerf-type basketball. The inventoryquantities, purchases, and sales of this product for the mostrecent year are as follows:
| Number of Units | Cost per Unit | Total Cost | |
| Inventory, January | 300 | $5.20 | $1,560 | |
| Purchase, March 12 | 100 | $5.60 | $560 | |
| Purchase, June 19 | 350 | $6.50 | $2,275 | |
| Purchase, September 3 | 250 | $8.10 | $2,025 | |
| | | | |
| Units Sold | 800 | | | |
A. What is the cost of the December 31 inventory and the cost ofgoods sold for the basketballs during the year under each of thefollowing cost flow assumptions? Show your work.
1. First in, first-out
2. Last in, first-out
3. Weighted Average cost (round to the nearest dollar, exceptunit cost)
B. Which of the three inventory pricing methods provides themost useful balance sheet valuation of inventory considering thecurrent replacement cost of the basketballs? Explain.
C. Which of the three inventory pricing methods provides themost useful measure of income in light of the costs incurred byTitans to replace the basketballs when they are sold? Considerwhich method results in a net income measure that is mostpredictive of future profitability. In other words, if you werethinking about buying stock in Titans, which inventory pricingmeasure gives you the most useful measure of its futureprofitability? Explain.
