1. Inventory and cost of goods sold figures prepared under the LIFO cost flow assumption versus the FIFO cost flow assumption can differ dramatically.

Required:

1. a.Would an analyst consider ending inventory asset value more useful if computed using LIFO or FIFO? Explain.
2. b.Would an analyst consider cost of goods sold more useful if computed using LIFO or FIFO? Explain.
3. c.AssumeacompanyusestheLIFOcostflowassumption.IdentifyanyFIFO-computedvaluesthatareusefulforanalysispurposes,andexplainhowtheyaredeterminedusingfinancialstatementinformation.

2.During a period of rising inventory costs and stable output prices, describe how new income and total assets would differ depending upon whether LIFO or FIFO is applied. Explain how your answer would change if the company is experiencing declining inventory costs and stable output prices.