Alright. Let's try this example. So a company had the following inventory data for the month of July in its periodic inventory system. So there we go, we have the inventory and then the purchases, right? Notice that in a periodic system, we're not going to be updating the inventory every time we make a sale, right? We deal with how much cost of goods sold we had at the end of the period. So the month-end physical count noted that there were 800 units on hand, right? So this is going to be the goal of pretty much all the times when you're dealing with FIFO, LIFO, and average cost, it's going to be either to calculate COGS or to calculate the ending inventory based on the information given to you, okay? So we have to find out what COGS and ending inventory is going to be and let's do this one at a time. Let's start with FIFO, then we'll do LIFO and then we'll do average cost. So let's start here with FIFO. The first thing we want to know is how much did we sell, right? Cost of goods sold, how many units did we sell? So the first thing we want to know is how many total units were there available for sale, right? We started with an inventory balance of 1000 units, and then we purchased 500 units and 600 units, so we could say that the total units that were available for sale were 2,100 units, right? 1000 plus 500 plus 600 gives us 2,100 total units, and they tell us that 800 of those units were left at the end of the period, right? So that means if there were 2,100 total that were available for sale, we either sold them or we didn't sell them, right? And the ones we didn't sell are the 800 that are left over, right? So if we take 2,100, the total available for sale, minus the 800 that are left over at the end of the period, we know that 1300 units were sold, right? We sold 1300 units. So that's the first step to find out how many units did we actually sell and that is by taking what's left over and the total right? In this case, we're in a FIFO system, right? So the FIFO system means that the first unit we bought is the first unit we're going to sell. So in this case, our beginning balance is the first thing we're going to sell. So we're going to sell all 1000 of that beginning balance, right? We're going to sell 1300 units but we're going to eliminate that beginning balance first. So the 1000 units in beginning balance times the $20 per unit, well, that's going to be $20,000 right? $20,000 for those first 1000 units, but we sold 1300 units, right? Not just 1000. So where are those next 300 units going to come from? Well, from the first in first out, right? We want to look at the oldest units. So in this case, we already sold the beginning balance, right? Don't cross these out, I'm going to uncross them because we're going to do this a bunch of times. So we sold those already, so we need to sell 300 more and that's going to come out of this purchase, right? Because that was the first ones in. We want to sell the oldest units first, so we're going to sell 300 of those, right? We don't sell the full 500, we only sold 1300 units, the first 1000 was the beginning balance and then 300 came out of this purchase. So that's a little bit of the trick there, right? We didn't sell that entire purchase, we only sold 300 from that purchase. So 300 times the price of that purchase which was $22.40. Well, I can't do that one in my head. Let's go ahead and type this in. 22.40 times 300, that comes out to 6,720. Okay? So that means this is our cost of goods sold, right? We figured out that we sold 1300 units and now we found the cost of those units. Okay? We picked out which units we sold and this is going to be the cost. $26,720. Alright? That's our cost of goods sold in the FIFO method. Okay? So now let's go ahead and see what's left in ending inventory, right? Ending inventory is going to be everything that we didn't sell. Sell, so we sold that inventory balance at the beginning, right? We sold the beginning balance and we sold 300 units from the purchase on July 11th. So we have 800 units here that we're dealing with here, right? They told us that in the problem there were 800 units on hand at the end of the month, so which ones are on hand? It's going to be the last units we bought, right? Because we sold all of the first units, so all that's left are the last units, so we definitely know that the 600 is still on hand, the 600 from July 30th, and those 600 were at a price of $23.30 So let's go ahead and figure out what those are worth. 600 times 23.3, $13,980 for those 600 units, but there are 800 total units, right? So those last 200, well, that's the 200 that we didn't sell from this shipment on July 11th, right? So it's going to be 200 units from the July 11th shipment times $22.40. So let's see how much that comes out to. 200 times 22.4, $4,480. Okay? So there we go. Now we know the value of our ending inventory gives us $18,460. Okay? So there we go. Our ending inventory is going to have that balance and our cost of goods sold would be the other number we calculated there. Cool? So now let's see how it's different from a LIFO perspective and from an average cost perspective. Alright, let's pause here and then we'll continue with the LIFO example.