Jackie’s Parts Shop recorded the following purchases and sales during the past year (see attached image).  Assume that Jackie’s Parts Shop sold all of the June 15 purchase and 100 cases each from the January 1 beginning inventory, the October 15 purchase, and the December 15 purchase.Determine the costs that should be assigned to ending inventory and cost of goods sold accounting to the periodic inventory method under each of the following assump-tions. (Round totals to the nearest dollar, and assume the periodic inventory system.) 1.Costs are assigned by the specific identification method. 2.Costs are assigned by the average-cost method. 3.Costs are assigned by the FIFO method. 4.Costs are assigned by the LIFO method. 5.What conclusions can be drawn about the effect of each method on the income statement and the balance sheet of Jackie’s Parts Shop?

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A: Requirement 1:   FIFO method:

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A: 1a.

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A:

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A:

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A:

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A:

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.