Inventory Principles 1. Shepherd Cycles used the FIFO inventory method in 2010. Shepherd Cycles plans to continue using the FIFO method in future years. A. Which inventory principle is most relevant...

Please just answer question 3

Extracted text: Inventory Principles 1. Shepherd Cycles used the FIFO inventory method in 2010. Shepherd Cycles plans to continue using the FIFO method in future years. A. Which inventory principle is most relevant to Shepherd's decision? Enter answer here. 2. Shepherd Cycles does not expect prices to change dramatically and wants to use a method that averages price changes. B. Which inventory method would best meet Shepherd's goal? Enter answer here. C. What if Shepherd wanted to expense out the newer purchases of goods instead? Which inventory would best meet that need? Enter answer here. 3. Refer to the information below that shows Boston Cycles' inventory data for the year ending December 31, 2011. Answer the following questions: • Assume that the ending inventory was accidentally overstated by $2,200. Enter answer here. • What are the correct amounts for cost of goods sold and gross profit? Enter answer here. Main Description Secondary Description Amount Sales revenue $46,000 Cost of goods sold: Beginning inventory $5,400 Net purchases $26,700 Cost of goods available $32,100| Less: Ending inventory ($3,600) Cost of goods sold $28,500 Gross profit $17,500