Bright Company uses periodic inventory system to account for inventories. On Jan. 31, a physical count showed the Company still had 500 items on hand. Other information related to inventory for January is given below:

January 1 Beginning inventory-------------------------------- 400 units @ $12.00

8 Purchase --------------------------------------------- 800 units @ $12.40

16 Purchase --------------------------------------------- 600 units @ $12.80

24 Purchase --------------------------------------------- 200 units @ $13.20

Instructions

1. Decide the value for ending inventory and calculate cost of goods sold for January by using FIFO, LIFO, and weighted- average cost flow assumptions, respectively. (show your computations)

2. Given above price trend, discuss the advantages and disadvantages if LIFO assumption is used.