E6-15 Inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 21 units at $1,800 - per unit May 15 Purchase 29 units at $1,950 Aug. 7 Purchase 10 units at $2,040 Nov. 20 Purchase 15 units at $2,100 There are 18 units of the item in the physical inventory at December 31. Determine the cost of ending inventory and the cost of goods sold by three methods, presenting your answers in the following form: Ending Inventory Cost of Goods Sold Inventory Method a. First-in, first-out b. Last-in, first-out c. Weighted average E6-16 Comparing inventory methods Assume that a firm separately determined inventory under FIFO and LIFO and then com- pared the results. 1. In each space below, place the correct sign (less than (), or equal (=)) for each comparison, assuming periods of rising prices. a. FIFO ending inventory LIFO ending inventory b. FIFO cost of goods sold LIFO cost of goods sold C. FIFO net income LIFO net income d. FIFO income tax LIFO income tax 2. Why would management prefer to use LIFO over FIFO in periods of rising prices? E6-16 Comparing inventory methods Assume that a firm separately determined inventory under FIFO and LIFO and then com- pared the results. 1. In each space below, place the correct sign (less than (), or equal (=)] for each comparison, assuming periods of rising prices. a. FIFO ending inventory - LIFO ending inventory b. FIFO cost of goods sold - LIFO cost of goods sold C. FIFO net income - LIFO net income d. FIFO income tax - LIFO income tax 2. Why would management prefer to use LIFO over FIFO in periods of rising prices