Chapter 8, Problem 8.17E

1.

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.

First-in-First-Out (FIFO): In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

Last-In, First-Out (LIFO): In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Determine: The cost of goods sold for 2016 using the FIFO method.

2.

To determine

The cost of goods sold for 2016 using the LIFO method.