Janise is a sole proprietor owning a small specialty store. the business records show that the cost of the stores individual inventory items have been steadily increasing. the cost of the end of the year inventory is 125,000 and the cost of the beginning of the year inventory was 150,000. Janis uses the lifo method of inventory valuation. which of the following statements are true?

a. Janine purchased more inventory during the year than sold during the same one year period
b. Janise would have a higher net income if she used the fifo method of inventory valuation instead of the lifo method
c Janise has apparently increased the volume of the items in her ending inventory as compared to the number of items in her beginning inventory
d. since the cost of the store inventory items is increasing Janine will have a smaller cost of goods sold amount on a lifo basis than on a fifo basis
e. none of the above

To determine which of the statements are true, we need to analyze the information provided.

Starting with the first statement:
a. Janine purchased more inventory during the year than sold during the same one-year period.

To verify this, we need to compare the cost of the beginning inventory with the cost of the ending inventory. If the cost of the ending inventory is lower, it would suggest that more inventory was sold than purchased. However, in this case, the cost of the ending inventory is $125,000 and the cost of the beginning inventory was $150,000. Since the cost of the ending inventory is lower, statement a is false.

Moving on to the second statement:
b. Janise would have a higher net income if she used the FIFO method of inventory valuation instead of the LIFO method.

To evaluate this statement, we need to understand the difference between the LIFO and FIFO methods. LIFO stands for "last in, first out" and assumes that the most recently purchased items are sold first. FIFO stands for "first in, first out" and assumes that the earliest purchased items are sold first.

Since the cost of inventory items has been increasing, under the LIFO method, the cost of goods sold (COGS) would be based on the higher costs of the most recent purchases. This would result in a higher COGS and lower net income compared to using the FIFO method. Therefore, statement b is true.

Moving on to the third statement:
c. Janise has apparently increased the volume of the items in her ending inventory as compared to the number of items in her beginning inventory.

The given information does not mention anything about the volume or quantity of items in the inventory. It only provides information about the cost of the inventory items. So, we cannot determine whether the statement is true or false based on the given information. Therefore, statement c is inconclusive.

Finally, the fourth statement:
d. Since the cost of the store inventory items is increasing, Janine will have a smaller cost of goods sold amount on a LIFO basis than on a FIFO basis.

As mentioned earlier, the increasing cost of inventory items favors the LIFO method, as it assumes the most recent, higher-cost items are sold first. Consequently, the COGS under the LIFO method would be lower compared to using the FIFO method. Therefore, statement d is true.

In conclusion, the true statements are b and d. Therefore, the answer is: b and d.