Bay Corp., sold 6,500 units of its product at $50 per unit inthe year 2009 and i

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Bay Corp., sold 6,500 units of its product at $50 per unit inthe year 2009 and incurred operating expenses of $5 per unit inselling the units. It began the year with 900 units in inventoryand made successive purchases of its products as follows:              Jan 1      Beginninginventory......................... 900 units @ $21 perunit              Feb 20  Purchaes........................................  1,950units @ $22 per unit              May 16 Purchase.......................................   1,050units @ $25 per unit              Oct 13  Purchase........................................   700units @ $26 per unit              Dec 11  Purchase.......................................  2,750 units @ $27 per unit                            Total................................................ 7,350units      a) Prepare comparative incomestatements for the three inventory costing methods of FIFO,LIFO,          and weightedaverage (round per unit cost to three decimals.) Include a detailedcost of goods sold          section aspart of each statement. The company uses a periodic inventorysystem, and its tax rate is          40%.       b) How would the financialresults from using the three alternative inventory costing methodschange           if Bayhad been experincing declining cost of purchases ofinventory?               Bay Corp., sold 6,500 units of its product at $50 per unit inthe year 2009 and incurred operating expenses of $5 per unit inselling the units. It began the year with 900 units in inventoryand made successive purchases of its products as follows:              Jan 1      Beginninginventory......................... 900 units @ $21 perunit              Feb 20  Purchaes........................................  1,950units @ $22 per unit              May 16 Purchase.......................................   1,050units @ $25 per unit              Oct 13  Purchase........................................   700units @ $26 per unit              Dec 11  Purchase.......................................  2,750 units @ $27 per unit                            Total................................................ 7,350units      a) Prepare comparative incomestatements for the three inventory costing methods of FIFO,LIFO,          and weightedaverage (round per unit cost to three decimals.) Include a detailedcost of goods sold          section aspart of each statement. The company uses a periodic inventorysystem, and its tax rate is          40%.       b) How would the financialresults from using the three alternative inventory costing methodschange           if Bayhad been experincing declining cost of purchases ofinventory?              

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