Jonathan N. Dorn CPA. As you can see this is Lifo and Fifo Inventory

valuation, to see how much your inventories worth, and your cost of goods sold

worth, and your net income, so this is just really fast how I do it

ok, so i got FIFO first-in-first-out, LIFO last in - first out

ok, this is how products come in,

this is for rising prices too, everything your going to see, is gonna say, oh rising prices and

inflation you know, very rarely i would think the prices go down, anyway so

30 10 20 30 This is how you get the inventory, this is how you get your product

ok rising prices, well say, you know first batch is $10 second batch $20

Third batch $30, okay I kind of think of this like a conveyor belt.

alright anyways, first-in-first-out, ok but it comes from this way, always in

rising prices, you know right

rising prices, look first-in-first-out, would be here !!

going to be the first out

last in first out, there, so first out means that they sold it, sold it your

last you know, out means sold, so that's going to be your cost of goods sold

so that's COGS

that's inventory, right here, this is going to be your

cost of goods sold

that's COGS Cost Of Goods Sold

here's going to be your inventory !!!! all right

got that. so, if you do first in first out your costs are going to be lower

ok, inventory is going to be higher

now what's that do your income??? If your costs are down, your incomes up. there inverse

what about LIFO ?? you do last in first out with rising prices your costs are

going to be higher, inventory is going to be lower, and Net income, if your costs are

higher, that means you're Net Income is going to be lower

alright, see you would think, everyone would just do this. Right? because your incomes lower.

Income lower. that means you pay less taxes, but really, if you think about

is this , last in first out doesn't make sense

so you're saying, the last thing in, so just came

off the truck, and that's the first thing you sell ???? What about the stuff sitting on the shelf??

we're not going to get into that, but anyways like to keep this short

but that's just how fast you can do this, so i will show you how fast

you know if you to question or something on a test, you can just fill it in like this

FIFO because it's the first one And LIFO 10 20 30

first-in-first-out. last in first out COGS COGS Inventory Inventory

this is lower, so this is higher, inverse, stays with that, higher, what's the

COGS are higher, INV Lower, Net Income Lower