CONCEPTUAL CONNECTION: Suppose 200,000 tents were produced (and 200,000 sold) but that the company had a beginning finished goods inventory of 10,000 tents produced in the prior year at $40 per unit. The company follows a first-in, first-out policy for its inventory (meaning that the units produced first are sold first for purposes of cost flow). 3(a) What effect does this have on the income statement? Complete the statements below. Under the FIFO assumption, beginning inventory is sold before current year production . Therefore, the cost of goods sold will be lower than it would be if there were no beginning inventory. 3(b) Prepare a cost of goods sold statement. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your statement. If an amount is negative, first enter a minus (-) sign.