The following data pertain to Company As inventory that was purchased on January5, Year1, for $40,000:

March 31, Year 1June 30, Year 1December 31, Year 1Estimated selling price$42,000$44,000$41,000Cost of disposal2,0002,0002,500Normal profit margin1,2001,4001,100Cost of completion1,0001,0001,000Current replacement cost38,00042,00036,000

Note: Entire inventory was sold on May 1, Year 2.

Email:

To:Bill WestFrom:Rufus BrownDate:June 1, Year 2RE:FIFO vs. LIFO

Hey Bill,

The company is planning to change its inventory cost flow method from LIFO to FIFO. To get us started, I will need your help in calculating some of the Year 1 quarterly inventory balances under both methods. I know that this is a bit of a challenge, but I have ultimate faith in you. Let me know if I can do anything to help.

Sincerely,

Rufus

Question

Use the information provided in the exhibits to calculate the inventory amounts as they should be reported in the financial statements prepared under last-in, first-out (LIFO) and first-in, first-out (FIFO) inventory cost flow methods. Enter the appropriate amounts in the associated cells. Enter all amounts as positive values. Round all amounts to the nearest whole number.

LIFOFIFO1.InventorybalanceonMarch31,Year12. Inventory balance on June 30, Year 13. Inventory balance on December 31, Year 1