Which inventory method should the company adopt

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The controller at Tallow Inc, is finalizing the company's financial statement for its first year of operations. She was reviewing the company's inventory purchases for the year and noticed the following trend in unit prices paid: January $18/unit; June $24/unit; October $26/unit. In order to impress investors and bankers, the controller wants to show high net earnings for the first year.

The inventory on hand at the end of the year consists of inventory from October purchases only.

Problem 1: Which inventory method should the company adopt?

Option 1: The method required by the tax authorities
Option 2: All method result in the same net income
Option 3: Weighted average
Option 4: Impossible to answer with only the information given

Reference no: EM132962617

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