Periodic inventory by three methods Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1 , purchases invoices during the next 12 months, and the inventory count December 31 are summarized as follows: 1. Determine the cost of the inventory on December 31 by the first-in, first-oat method. If the inventory of a particular model comprises one entire pifrchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in 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. If the inventory of a particular model comprises one entire purchase plus a portion of anothe purchase acquired at a different unit cost, use a separate line for each purchase. If units are Inventory at two different costs, enter the units PURCHASED MOST RECENTLY first. 2. Determine the cost of the inventory on 2. Determine the cost of the inventory on December 31 by the last-in, first-out method. 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. If units are inventory at two different costs, enter the OLDEST units first. 3. Determine the cost of the inventory on December 31 by the weighted average cost method, Dymac Appliances Cost of the Inventory-Weighted Average Method 4a. Which inventory method would be preferred for income tax purposes in periods of rising prices? 4b. Which inventory method would be preferred for income tax purposes in periods of declining prices