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Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost- or market to each inventory item, as shown in Exhibit 10. Item Inventory Quantity Market Value per Unit Cost per Unit (Net Realizable Value) JFW1 81 $34 $39 SAWS 171 17 14 Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 10 units at $25 Feb. 17 Purchase 20 units at $26 Jul. 21 Purchase 15 units at $27 Nov. 23 Purchase 14 units at $27 There are 10 units of the item in the physical Inventory at December 31. The periodic inventory system is used. Round average unit cost to the nearest cent and final answers to the nearest whole dollar, if required. a. Determine the inventory cost by the first-in, first-out method. b. Determine the inventory cost by the last-in, first-out method. c. Determine the inventory cost by the weighted average cost method. Comparing Inventory Methods Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. a. In each dropdown that follows, select the correct sign [less than ( ), or equal (=)] for each comparison, assuming periods of rising prices. 1. FIFO inventory LIFO inventory 2. FIFO cost of goods sold LIFO cost of goods sold 3. FIFO net income LIFO net income 4. FIFO Income taxes LIFO income taxes b. Why would management prefer to use LIFO over FIFO in periods of rising prices? 1. Income shown on the company's tax return would be lower if LIFO rather than FIFO is used. 2. Income shown on the company's tax return would be higher if LIFO rather than FIFO is used. 3. Cost of goods sold shown on the company's income statement would be lower if LIFO rather than FIFO is used. 4. Dividends shown on the company's financial statements would be higher if LIFO rather than FIFO is used

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