2. Determine the cost of the inventory on December 31, 20Y7, by the last-in, first-out method, following the procedures indicated in (1). Under LrFo, if a model is inventory at two different costs, enter the remaining units that were purchased earliest first. 3. Determine the cost of the inventory on December 31,2077 , by the average cost method. 1. Determine the cost of the inventory on December 31,20Y7, by the first-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. Under FIFO, if a model is in inventory at two different costs, enter the remaining units that were purchased most recently first. 3. Determine the cost of the inventory on December 31,20Y7, by the average cost method. 4. Which method (FIFO or LIFO) would be preferred for income tax purposes in periods of rising prices? Which method (FIFO or LIFO) would be preferred for income tax purposes in periods of declining prices