Chapter 6, Problem 6.6E

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

In First-in-First-Out method, the cost of initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are considered as cost of goods sold, for the items which are sold first. The value of the closing stock consists the initial purchased items.

To Compute: The ending inventory at May 31, and cost of goods sold using the FIFO methods.