Periodic Inventory by Three Methods December 31 are summarized as follows: Required: 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. inventory at two different costs, enter the units PURCHASED MOST RECENTLY first. 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. PURCHASED MOST RECENTLY first. 2. Determine the cost of the inventory on December 31 by the last-in, first-out method. first. 4. would be preferred for income tax purposes in periods of rising prices