Case 2. The inventory costing method a company chooses can affect the financial statements and thus the decisions of the people who use those statements. Required 1. A leading accounting researcher stated that one inventory costing method reports the most recent costs in the income statement, while another reports the most recent costs in the balance sheet. What did the researcher mean? Name the methods. 2. Conservatism is an accepted accounting concept. Would you want the management of your company to be conservative in accounting for inventory? Give your reason. 3. TriArc Co. follows conservative accounting and writes the value of its inventory of bicy- cles down to market, which has declined below cost. The following year, an unexpected cycling craze results in a demand for bicycles that far exceeds supply, and the market price increases above the previous cost. What effect will conservatism have on the income of TriArc during each year?