1. Determine the cost of the inventory on December 31 by the first-in, first-out method. PURCHASED MOST RECENTLY first. Required: 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. 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