Inventory Costing Solution $($Periodic Inventory System$)$

Science Education Supplies, Inc. began the year with $70$ Biology Lab Microscopes in stock. The following table shows the quantities on hand and purchased during the year.

$\backslash$table$[[,,,],[$Acquisition Dates,Units,Unit Cost,Total Cost$],[$Beginning Inventory, Jan. $1,70,57\mathrm{.}81,],[$Purchases$,,,],[$January $25,110,58\mathrm{.}03,],[$March $8,80,59\mathrm{.}00,],[$June $15,210,60\mathrm{.}00,],[$July $27,70,63\mathrm{.}00,],[$August $30,60,64\mathrm{.}00,],[$Units and Cost of Goods Available fo$,,,]]$

Instructions: Determine the value of the ending inventory reported on the balance sheet and the value for cost of goods sold recognized on the income statement for the following four scenarios. Ending inventory consists of $150$ microscopes for each scenario.

Specific Identification Method: Assume the ending inventory consists of the $60$ units acquired on August $30,20$ units acquired on July $27,$ and $70$ units acquired on June $15$

$\backslash$table$[[$Acquisition Dates,Units,Unit Cost,Total Cost$],[,,,],[,,,],[,,,],[$Ending Inventory Value,,,$]]$

$\backslash$table$[[$Total Cost of Goods Available,$],[$Less: Ending Inventory,$],[$Cost of Goods Sold Value:,$]]$

Weighted Average Cost Method

$\backslash$table$[[$Weighted Avg. Cost per Unit $-,],[$Units in Ending Inventory $-,],[$Ending Inventory Value $=,]]$

$\backslash$table$[[$Weighted Avg. Cost per Unit $-,],[$Units Sold $-,],[$Cost of Goods Sold $=,]]$

FIFO $($First$-$In First$-$Out$)$ Method

Compute Ending Inventory

$\backslash$table$[[$Acquisition Dates,Units,Unit Cost,Total Cost$],[,,,],[,,,],[,,,],[$Ending Inventory Value $=,,,]]$

Compute Cost of Goods Sold

$\backslash$table$[[$Total Cost of Goods Available,$],[$Less: Ending Inventory,$],[$Cost of Goods Sold Value:,$]]$

LIFO $($Last$-$In First$-$Out$)$ Method

Compute Ending Inventory

$\backslash$table$[[$Acquisition Dates,Units,Unit Cost,Total Cost$],[,,,],[,,,],[$Ending Inventory Value $=,,,]]$

Compute Cost of Goods Sold

$\backslash$table$[[$Total Cost of Goods Available,$],[$Less: Ending Inventory,$],[$Cost of Goods Sold Value:,$]]$

Which inventory valuation method will be likely to approximate replacement cost on the balance sheet?

During periods when prices continue to rise, which inventory valuation method will result in the highest net income being reported?

During periods when prices continue to reise, which inventory valuation method will result in the lowest net income being reported?