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To solve this inventory management problem, we need to calculate the **Cost of Goods Sold (COGS)** and **Ending Inventory** using the **FIFO (First In, First Out)** and **LIFO (Last In, First Out)** methods.

Here's the step-by-step approach:

### 1. FIFO (First In, First Out)
- Under FIFO, the oldest inventory items are sold first.

#### Beginning Inventory:
- 120 units at $3 each.

#### Transactions:
- **Sale of 90 units at $10**: 
  - These will come from the beginning inventory since it's the oldest. 
  - Cost of 90 units = 90 units × $3 = **$270** (COGS for the first sale).

- **Purchase of 20 units at $4 each**: 
  - 20 units added to inventory at $4 each.

- **Purchase of 15 units at $5 each**: 
  - 15 units added to inventory at $5 each.

- **Sale of 25 units at $11**:
  - After selling 90 units, 30 units remain from the beginning inventory. 
  - For this sale, 25 units will come from the remaining 30 units at $3 each.
  - Cost of 25 units = 25 units × $3 = **$75** (COGS for the second sale).

#### Total COGS (FIFO):
COGS = $270 (first sale) + $75 (second sale) = **$345**

#### Ending Inventory (FIFO):
- Remaining inventory after sales:
  - 5 units from the beginning inventory at $3 = 5 × $3 = **$15**
  - 20 units from the first purchase at $4 = 20 × $4 = **$80**
  - 15 units from the second purchase at $5 = 15 × $5 = **$75**
  
- Ending inventory = $15 + $80 + $75 = **$170**

### 2. LIFO (Last In, First Out)
- Under LIFO, the most recent inventory items are sold first.

#### Transactions:
- **Sale of 90 units at $10**:
  - These will come from the newest inventory. 
  - Use the 15 units from the most recent purchase ($5 each), and the next 75 units from the previous batch ($4 each).
  - Cost of 15 units at $5 = 15 × $5 = **$75**
  - Cost of 75 units at $4 = 75 × $4 = **$300**
  
  Total cost for the first sale = $75 + $300 = **$375**

- **Sale of 25 units at $11**:
  - After selling 90 units, the next 25 units will come from the beginning inventory at $3 each.
  - Cost of 25 units = 25 × $3 = **$75**

#### Total COGS (LIFO):
COGS = $375 (first sale) + $75 (second sale) = **$450**

#### Ending Inventory (LIFO):
- After both sales, the remaining inventory consists of:
  - 25 units from the beginning inventory at $3 = 25 × $3 = **$75**
  
- Ending inventory = **$75**

### Summary of Results:

| Method | COGS | Ending Inventory |
|--------|------|------------------|
| FIFO   | $345 | $170             |
| LIFO   | $450 | $75              |

Would you like any clarifications or further details?

Here are 5 related questions:
1. What are the advantages of using the FIFO method over LIFO?
2. How does the choice of inventory method impact financial statements?
3. Can you explain the weighted average cost method?
4. Why does LIFO lead to higher COGS in inflationary periods?
5. How does the periodic inventory system differ from the perpetual inventory system?

**Tip:** In periods of rising prices, FIFO usually results in lower COGS and higher profits, whereas LIFO results in higher COGS and lower profits.

Using the periodic inventory method, calculate the Cost of Goods Sold (COGS) and Ending Inventory for Abiy's Apple Pies using FIFO and LIFO methods based on the given inventory transactions.

Learn how to calculate the Cost of Goods Sold (COGS) and Ending Inventory for Abiy's Apple Pies using FIFO and LIFO methods. This accounting problem involves a periodic inventory system with multiple sales and purchase transactions, ideal for college-level accounting students.

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