The following data pertains to Efficient Market Investment software packages in the inventory of the Investment Software division of Efficient Market Investment Outlets:

Inventory, January 1	230	units at $127
Purchases:
May 10	210	units at $125
August 18	280	units at $124
October 1	230	units at $125
Inventory, December 31	234	units

2. 1(a). Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the FIFO method. DONE

3. 1(b). Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the LIFO method. DONE

4. 1(c). Determine the unit cost, cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the average cost method. DONE

   2. Assume that the replacement cost of each unit on December 31 is $125.19. Using the lower of cost or market rule, find the inventory amount under each of the methods given in 1.

Analyze: What is the difference between the cost and market value of the inventory using the LIFO method?

FIFO	Cost of Goods Available for Sale			Cost of Goods Sold			Ending Inventory
	Number of units	Unit cost	Total cost	Number of units	Unit cost	Total cost	Number of units	Unit cost	Total cost
Beginning Inventory, January 1	230	$127	$29,210	230	$127	$29,210
Purchases:
May-10	210	125	26,250	210	125	26,250
Aug-18	280	124	34,720	276	124	34,224	152	124	18,848
Oct-01	230	125	28,750				230	125	28,750
Total	950		$118,930	716		$89,684	382		$47,598

LIFO	Cost of Goods Available for Sale			Cost of Goods Sold			Ending Inventory
	Number of units	Unit cost	Total cost	Number of units	Unit cost	Total cost	Number of units	Unit cost	Total cost
Beginning Inventory, January 1	230	$127	$29,210				230	$127	$29,210
Purchases:
May-10	210	125	26,250	206	125	25,750	4	125	500
Aug-18	280	124	34,720	280	124	34,720
Oct-01	230	125	28,750	230	125	28,750
Total	950		$118,930	716		$89,220	234		$29,710

Average Cost	Cost of Goods Available for Sale			Cost of Goods Sold			Ending Inventory
	Number of units	Unit cost	Total cost	Number of units	Average unit cost	Total cost	Number of units	Average unit cost	Total cost
Beginning Inventory, January 1	230	$127	$29,210
Purchases:
May-10	210	125	26,250
Aug-18	280	124	34,720
Oct-01	230	125	28,750
Total	950		$118,930	716	$125.19	$89,636.04	234	$125.19	$29,294.46

	Method	Number of units	Valuation Based on:		Lower of Cost or Market
			Cost	Market
a.	FIFO
b.	LIFO
c.	Average cost

Difference