Inventory Costing Solution (Periodic Inventory System)
Science Education Supplies, Inc. began the year with 70 Biology Lab Microscopes in stock. The following table shows the quantities on hand and purchased during the year.
Acquisition Dates	Units	Unit Cost	Total Cost
Beginning Inventory, Jan. 1	70	57.81	4,046.70
Purchases
January 25	110	58.03	6,383.30
March 8	80	59.00	4,720.00
June 15	210	60.00	12,600.00
July 27	70	63.00	4,410.00
August 30	60	64.00	3,840.00
Units and Cost of Goods Available for Sale
Instructions: Determine the value of the ending inventory reported on the balance sheet and the value for cost of goods sold recognized on the income statement for the following four scenarios. Ending inventory consists of 150 microscopes for each scenario.
Specific Identification Method: Assume the ending inventory consists of the 60 units acquired on August 30, 20 units acquired on July 27, and 70 units acquired on June 15.
Acquisition Dates	Units	Unit Cost	Total Cost
Ending Inventory Value
Total Cost of Goods Available
Less: Ending Inventory
Cost of Goods Sold Value:
Weighted Average Cost Method
Weighted Avg. Cost per Unit =			Weighted Avg. Cost per Unit =
Units in Ending Inventory =			Units Sold =
Ending Inventory Value =			Cost of Goods Sold =
FIFO (First-In First-Out) Method
Compute Ending Inventory
Acquisition Dates	Units	Unit Cost	Total Cost
Ending Inventory Value =
Compute Cost of Goods Sold
Total Cost of Goods Available
Less: Ending Inventory
Cost of Goods Sold Value:
LIFO (Last-In First-Out) Method
Compute Ending Inventory
Acquisition Dates	Units	Unit Cost	Total Cost
Ending Inventory Value =
Compute Cost of Goods Sold
Total Cost of Goods Available
Less: Ending Inventory
Cost of Goods Sold Value:
1. Which inventory valuation method will be likely to approximate replacement cost on the balance sheet?
2. During periods when prices continue to rise, which inventory valuation method will result in the highest net income being reported?
3. During periods when prices continue to reise, which inventory valuation method will result in the lowest net income being reported?