Earl CoWas Formed on January 2, 2007, to Sell a Single

Short Answer

Earl Co.was formed on January 2, 2007, to sell a single product.Over a two-year period, Earl's acquisition costs have increased steadily.Physical quantities held in inventory were equal to three months' sales at December 31, 2007, and zero at December 31, 2008.Assuming the periodic inventory system, the inventory cost method which reports the highest amount of each of the following is $\begin{array}{lll}&\text { Inventory } & \text { Cost of Sales } \\&\text { December 31, 2007 }&2008\\\text { a. } & \text { LIFO } & \text { FIFO } \\\text { b. } & \text { LIFO } & \text { LIFO } \\\text { c. } & \text { FIFO } & \text { FIFO } \\\text { d. } & \text { FIFO } & \text { LIFO }\end{array}$