391 PR 7-5B Periodic inventory by three methods 7 K + - Pappa's Appliances uses the periodic inventory system. Details regarding the inventory or appliances at January 1, purchases invoices during the year, and the inventory count at December 31 are summarized as follows: Purchases Invoices Model Inventory, January 1 1st 2nd 3rd Inventory Count, December 31 C55 3 at $1,040 3 at $1,054 3 at $1,060 3 at $1,070 D11 9 at 639 7 at 645 6 at 666 6 at 675 11 F32 5 at 240 3 at 260 1 at 260 1 at 280 2 H29 6 at 305 3 at 310 3 at 316 4 at 317 4 K47 6 at 520 8 531 4 at 549 6 at 542 8 S33 - 4 at 222 4 at 232 - 2 X74 4 at 35 6 at 36 8 at 37 7 at 39 Instructions 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. Present data in columnar form, using the following headings: Model Quantity Unit Cost Total Cost If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. 2. Determine the cost of the inventory on December 31 by the last-in, first-out method, following the procedures indicated in (1). 3. Determine the cost of the inventory on December 31 by the weighted average cost method, using the columnar headings indicated in (1). Discuss which method (FIFO or LIFO) would be preferred for income tax pur- poses in periods of (a) rising prices and (b) declining prices. C e