Sunrise company inventory records contained the following information regarding its latest Sunrise model. The  company uses  a periodic inventory system. Beginning inventory, January 1,2019                                     1,200 units @ OR 80 each Purchases:    January 15                                                                            2,000 units@ OR 95 each    January 21                                                                            1,600 units@ OR100 each Sales:   January 5                                                                               800 units   @ OR 120 each   January 22                                                                             1,600 units@ OR 130 each   January 29                                                                             800 units   @ OR 135 each Ending inventory, January 31, 2019 was 1,600 units   Required :  Compute COGS for January and ending the inventory using FIFO, LIFO and weighted average methods.

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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.