Bufford Appliance uses a perpetual inventory system. For its flat-screen. television sets, the January 1 inventory was 3 sets at $650 each. On January 10, Bufford purchased 8 units at $690 each. The company sold 3 units on January 8 and 4 units on January 15. Compute the ending inventory under FIFO, LIFO, and under moving- average cost.

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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.