For each item below indicate whether fifo or lifo will

Question

Question: 1. For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount when inventory costs are rising versus falling. The first answer is provided as an example.

2. Shankar Company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 2, 2012, for $30,000 and then sells this inventory on account on March 17, 2012, for $50,000. Record transactions for the purchase and sale of inventory.