The following information is available for Clancy Company: $\begin{array}{ll}\text{ Beginning inventory }& 600\text{ units at }\$4\\ \text{ First purchase }& 900\text{ units at }\$6.50\\ \text{ Second purchase }& 500\text{ units at }\$7.20\end{array}$ Assume that Clancy uses a periodic inventory system and that there are 760 units left at the end of the month.
Instructions
Compute the cost of ending inventory under the
(a) FIFO method.
(b) LIFO method.

FIFO

"First In, First Out," an inventory valuation method where the first items placed into inventory are the first sold.

LIFO

An accounting method for valuing inventory that assumes the last items produced or purchased are the first ones sold.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.