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Overview of Assignment: There are 3 main methods for inventory valuation that have been examined in this course. They are (1) FIFO, (2) Moving Weighted

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Overview of Assignment: There are 3 main methods for inventory valuation that have been examined in this course. They are (1) FIFO, (2) Moving Weighted Average Method, and (3) Specific Identification. The first-in, first-out method assigns costs to items sold assuming that the cost of the first units purchased are the first to be recovered. Ending inventory items are the ones most recently purchased. FIFO provides different amounts in periods of rising and falling prices. For example, FIFO calculations provide lower income and taxes in periods of declining prices. It provides for high income and taxes in periods of rising prices. The moving weighted average method assigns costs by using the current moving average cost per unit. The moving weighted average method smooths out changes in prices. Alternatively, the specific identification method assigns costs to each inventory item based on specific invoice prices. The specific identification method exactly matches expenses and revenues. Note that the International Financial Reporting Standards (IFRS) does not permit last-in, first-out (LIFO). Students will do the following: 1. Select one publicly traded company, such as Google, Netflix or IBM. It can be one of these 3 or a different one. Provide a summary of the company's business. It must be a different company than the one the student selected for the mid-term assignment. 2. Select one of the 3 main methods for inventory valuation identified above. Then, explain why you think it is the best inventory method to use for your company. In so doing, answer the following: a Describe the inventory valuation method in detail. How does it value inventory? What are its advantages and disadvantages? How do the advantages make it a good choice for the selected company? b. Explain how the selected inventory valuation method, in your opinion, is better suited for your selected company than the other two methods. In so doing, explain the advantages and disadvantages of the other methods. The assignment should have a short introduction and conclusion. 1

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