describe one advantage for each of the inventory costing methods specific identifica 645461

1. Describe one advantage for each of the inventory costing methods: specific identification, FIFO, LIFO, and weighted average.

2. When costs are rising, which method reports higher net income—LIFO or FIFO?

3. When costs are rising, what effect does LIFO have on a balance sheet compared to FIFO?

4. A company takes a physical count of inventory at the end of 2010 and finds that ending inventory is understated by $10,000. Would this error cause cost of goods sold to be overstated or understated in 2010? In year 2011? If so, by how much?

5. Use LCM applied separately to the following individual items to compute ending inventory.