Gold Leaf Ltd. began operations in 2011. The following presentation relates to the inventory valuations of the company at the end of the year using different inventory methods.

There was no beginning balance of inventory in 2011. The value referred to in the third column is the net realizable value.
Required:
a. For 2010, state whether the prices for purchasing inventory went up or down.
b. For 2014, state whether the prices went up or down.
c. State which of the two inventory methods would show the highest income in each year.
d. Which method would show the lowest income for the four years combined?

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Lower of FIFO Cost and NRV Date December 31, 2011 December 31, 2012 December 31, 2013 December 31, 2014 Moving Average $120,000 235,000 260,000 210,000 FIFO SI I (),000 225,000 245,000 235,000 $105,000 220,000 235,000 235,000