This is a very exciting show. The Second Amendment of Free Society, it's important now. Maybe it's always been important, but it's going to be important, even more important, in the future. We have Abhi Soyfer, former dean of the William S. Richardson School of Law, and who teaches even today on constitutional law. That's been his expertise for the past 200, 240 years. And Peter Hoffenberg, who is a history person at UH Manoa. And he's into history for the past 10,000 years. Welcome to the show, you guys. It's so nice to see you. Aloha, good to see you. Good to be here. So we're talking about the Second Amendment. And I wonder if I could tap Peter first on the history of it, from the time the Constitution was well, from the time the amendments were passed. It's not exactly the same time. And just a historical perspective on it. Sure, of course. And then Abhi, I'm hoping you can correct me. My background, as you know, is European history. So for your audience, my lens is how the founding fathers and Americans have reinterpreted what they thought was their European heritage. I think this is important because the originalists today on the courts are going back and researching documents from the 18th century. So if we're going to think about originalist argument what was intended, I think we need to understand the inheritance that they have. So historically, it seems to be a couple of key questions. And Abhi, you can help us with the law for these. One is, ever since the first gun was created out in public, there have been efforts to manage and limit guns as in gun control. The 16th century British state had efforts because they worried about what would it mean for weaponry to be in the hands of people who may not have either the state or the public interest in mind. So that's the first thing. There's a long history of this debate. I'm sure everybody in the audience has enjoyed Romeo and Juliet. And you can distill Romeo and Juliet down into what should the prince do when two families are dueling? And what they're dueling with are the equivalent guns today, right? They're in public. They're dueling. No particular interest is actually causing chaos. So one is there's a very long history of this, particularly in the Western world. Secondly, it really, to great degree, historically comes down on your view of who should have guns. The European tradition, and we don't have exactly the same here, is the Europeans worried about aristocrats having weapons. Farmers and popular people would grab farm weapons. And I'm sure all of us in one way or another imagine what can be done with a farm weapon, all right? So we're talking about a particular class and social interests, right? The equivalent in America is the southern plantation lords and their monopoly on coercion. So one would be long term. Secondly is who has the right. And thirdly, and Avi can definitely, very importantly correct me, add here, is we have this great debate about what freedom is. And we seem to the extreme have a belief that freedom is your title to do whatever you would like to do. And that's not really the tradition of freedom in most of the world. So let me stop there. And Avi can bring up the law. And I think also the audience knows that there are several very public cases right now. So I'm hoping. They didn't have to have a second amendment. They didn't have to have it. They decided they would have it to ensure that some people in the society would be entitled to carry guns. But the title question of the show is, is it necessary for a free society? Does it help? Does it hinder? Interesting. One of the arguments fairly recently in the Supreme Court was, hey, look, there are all these other countries that don't have the equivalent of the Second Amendment. And they're civilized. And it used to be sometimes the Supreme Court would worry about where our fundamental rights fit in the civilized world or the Anglo-American world they said at one point. Well, we don't worry about that anymore. We're on our own. And we have not had this right. It's an important thing to underscore. We have not had this right as individuals until 2008. The Supreme Court, several times, rejected the claim that there was a right to these arms and was only when Justice Scalia discovered, he thought, history on his side in saying there is an individual right to their arms. And it's interesting how little is actually said in the Second Amendment and what he did with it. So the Second Amendment says, a well-regulated militia being necessary to the security of a free state comma, the right of the people to keep in their arms comma, shall not be infringed. So the Heller case, carefully selected, was a guy who was a security guard, actually a security guard at a federal judicial center for a good Marshall building, which is ironic in itself. And he said, DC's a really dangerous place and DC has a very strong gun control law. And when I go home, I have to take my gun apart. I can't have live ammunition in it. I can't even use it. And I'm nervous about my own security. So it was that case that got to the Supreme Court. And what I think is the key to the Scalia opinion for the court is to say the following about the text that you've now seen. The Second Amendment is naturally divided into two parts. It's prefatory clause and the operative clause. The former does not limit the latter dramatically, but rather announces a purpose, a purpose. So he didn't believe in natural law, natural justice. That's why we had texts and why he claimed to be an originalist or a textualist, but here naturally it has two clauses, which is a remarkable thing to say. What does that mean? It actually has two clauses anyway. What it meant was I can talk about the second part and not about the first part. This is the first part was about militias and it was important to the Americans, former colonists who had after all just come out of a war. And so they were concerned about militias. And it is traditional, as was said in passing, that cities and states regulated airing guns. In fact, I want to quote from a Hawaii territorial, pre-territory of the monarchy. So the monarchy had the following action to prevent the carrying of deadly weapons, which recognized the habit of carrying deadly weapons is dangerous to life and public peace. So they said in 1854 that we're gonna have fines and imprisonment for any person not authorized by law who shall carry or be found armed with any bowie knife, sword, cane, pistol, air gun, slung shot, or other deadly weapon. And that was continued in territorial time. So the history of laws regulating carrying openly or concealed is a history of saying no, only certain people, which they went on to say, soldiers and so on, or maybe exempt. That's what the Hawaii law is right now. Hawaii law is perhaps on the ropes because of a case out of New York, which is similar to what we have here. And the Supreme Court looks inclined at least to strike it down. Now, what happened just to fill in a little bit and then we'll go back to Peter and to Jay. So that's a federal decision in 2008 in Heller. Question then was, does it apply to the states? And that's the argument about what's fundamental. In 2010, the Supreme Court's in a fractured decision said, yes, it does apply to the states with different opinions as to why it applies to the states or whether this is like substantive due process, which the conservatives claim not to like. And Scalia said, yeah, it is substantive due process, but I'll go along. Thomas interestingly said, we should go back to the beginning and it's the privileges or immunities part of the 14th Amendment, which has been a dead letter basically since 1873. So he would go off in that direction. In any event, they said it does apply to the states. So that's why our law and the laws of all the other states are in a way before the Supreme Court right now. Even in Heller, however, the court recognized that some kinds of arms could not be carried, were not covered by Heller. And secondly, that if you had a long standing law against carrying arms, then that was presumptively legal. So we don't know what the court's gonna do, but just to finish this, Judge Bybee on the Ninth Circuit recently wrote, and they've been looking at this for a number of years. So this is about Hawaii and the name of the case is young. And he said, and he's someone who considers himself an historian, but he's also a very conservative guy. He is regarded as the main author of the torture memo during the George W. Bush administration. So he's no flaming liberal. He says, our review of more than 700 years of English and American legal history reveals a strong theme. Government has the power to regulate arms in the public square. History is messy. The record is not uniform, but this is the overwhelming evidence. I think that's right. I think Peter can fill that in and add to it. But does the court really care about the history? We shall see. Oh, Peter. Thank you. I'm coming to your class for sure. I've always wanted to. Yeah. So, Jay, did you have another question or do you want to? Oh, many, many questions. But Avi suggested you might want to, you know, get into this right now. Well, just very briefly, I obviously prefer to agree with Avi for a variety of reasons, including baseball. But I think today what we have, and contrary to what some of the justices would see, really it's hard to see a political court. I don't know if it's ever been, but right now it seems to be very difficult. And that's not to say partisan. It's to say, picking up on what Avi said, this court seems to be inclined towards American exceptionalism. Exceptionalism about religion and about abortion. I'm not saying right or wrong, but philosophically, the American experience with gun control is also exceptional in a couple of, I think, important ways. The question of a militia made perfect sense in the late 18th, early 19th century when there was no standing army. There was still plenty of violence, not internally, both Native Americans and potentially with Canadians. So to have a militia, right, made sense. Right, that made sense. Then at least two or three very important works by renowned historians have suggested that let's also be honest about this. That the Southern States, again, wanted the Second Amendment. They did not want African-American slaves arms. There was no army to protect slavery until 1861 with the army in North Virginia, but weapons in the hands of slave owners and their allies were either one, a deterrent to rebellion, which everybody went to bed hearing, or two, a dramatic response. When we talk about American conceptualism, I think those are two we need to act. Most European kingdoms had standing armies, and so militias were not really relevant. You see what militias mean in European tradition. They mean the arming of political extremists, all right? And secondly, and I don't think the court wants to really mess with this, Avi, you can correct me, is it is one war at least partial legacy of slavery. At least that's what two very well-respected authors who are American historians have written.  Okay. I am now resigning for the show. So wasn't it Cain, it was a gun you had. But, you know, the NRA has changed. They were threatening queens. You were doing this in self-defense. No, no, no. This was up in the Catskills. Thank you very much. Yeah, I could see Jay as head of the militia. Yeah, he was. But my point is the NRA has completely changed. And the people in and around the NRA, including the Russians, you know, have a whole new view of guns, and it's connected, you know, with assault rifles. It's connected. It's political. It's Trump. It's a right-wing militia. To use militia in the common definition today, it's a lot different than in revolutionary times, the word militia. So we have a very dangerous situation on our hand because of the political environment in which we live. And I think we have to look at the Second Amendment in the context of that. I consider the Second Amendment a very dangerous part of our constitutional future. Don't you, Avi? Well, if the Second Amendment said what the court has said instead, maybe, but it's not that you can't blame the Second Amendment, you got to blame the court, I think. And I've got to emphasize that the Supreme Court of the United States several times had the opportunity to say it protects individual rights and several times said, no, it doesn't. So what they did in 2008 was not following precedent at all. And it was really just saying, we don't care about that. We've now found something in the text which I tried to suggest is not really in the text at all, nor is it in history or tradition or the usual things that you looked at. So you have Parkland and dozens of other examples all in the last few years where it's obvious that we need more gun control. It's also obvious that the GOP is never, in its present form, never gonna vote for any gun control and it becomes very dangerous for the citizen. That leaves it in the hands of the Supreme Court to reverse or modify Heller, to come up with a new approach where the average person has greater security on the streets of our country. But this doesn't seem likely either. Where are we going, Avi? Well, I'm more optimistic than you as a general rule but on this one, it's very hard to be optimistic. Now, it may be the Supreme Court has a narrow decision and that could be for lots of reasons including that some of the most conservative and most recent justices wanna kind of keep their powder dry as it were for another term or two before they really do much more damage. And I personally think they're not gonna overrule Roe versus Wade, for example. They're cutting away at it as the court has been doing for decades. So they will cut away at it further. And I think that's not the Texas case. I think it's the Mississippi case. And they'll say, oh, it's an undue burden. No, it's not undue burden. We hear by fine. So the court has a lot of discretion and a lot of ways of hiding what they're doing from the general public. And optimist that I may be, that's really tricky. Now, an argument about the vigilante part of the most recent Texas abortion law was, hey, if the state can do this and then say, oh, you can't sue us. You can't sue anyone in the state. The same thing could go on in a state that likes gun control. But they could say, well, private citizens can enforce this. So that one little moment, the second amendment argument was actually useful when Justice Kagan pinned down the Texas lawyer. But let's hope. Now, we have people, and it's dramatic right now as we're watching two jury trials that people say self-defense. You just say, okay, self-defense. And that's why I carried from cross-state lines, I carried this gun, an assault rifle. I needed that for self-defense, which is the written house of the Wisconsin case. We'll see what the jury does. He may be acquitted, it's a possibility at the moment. And what's troubling about that is there are people who really won't like an acquittal. And that takes us back to the streets. And on the streets, there is a lack of gun control, I would say, that stands in the way of gun violence in the streets. So the whole thing is, it seems to be accelerating. I was telling you about an article, a blog in the Vera Institute of Justice. This was in 2014 where they made an analysis of why young people and maybe not so young people got involved in guns, got involved in violence. And what seems clear is that in our current environment, including the media, not only entertainment media, which has plenty of violence with guns, I mean, you could count the number of guns you see every day, every day in so many movies and shows. It's ridiculous and it doesn't, even with all the violence in the country, the amount in the media does not accurately portray. The reality either is so many guns, but also it's the news itself, all parts of the news, which seems to extol the virtue of guns. And then of course, the Vera Institute talked about what makes guns and violence so popular among young people and how they're attracted to it. It's a whole psychological process, including minimization of the violence when you get hurt. And if you survive, then the psychological mechanism is to go back and do it yourself. The victim becomes the assailant. And so what we have in our modern society thanks to the media and other factors, I suppose, is an increase in the amount of violence and guns are central in the amount of violence. I'm going to report to our audience that Peter Havenberg's internet went down and he is unable to join us. And so it's just, it's just obvious me to talk about, you know, I mean, this is more than just guns. It's the ability of the government as it stands to properly interpret the constitution and to keep us safe, which is a fundamental obligation of government everywhere and anywhere. And so, you know, what does this tell us about the constitution in current times and the government's enforcement at the right word, government's interpretation, the government's deployment of the constitution in current times. It's a larger question than just guns. Well, I haven't asked you to ask that or say that, but it does feed right into something that I've been working on for decades without any effect and I'm now trying to write about. And that is that there was such a notion of the government as protecting the citizenry. And that was actually constitutionalized, wasn't it, with equal protection in the 14th Amendment. And the equal part is where we have spent all our time really and we've forgotten the protection part, but they were quite serious about the protection part. And in fact, they based the 14th Amendment largely on 1866 Civil Rights Act, the first civil rights act ever which guaranteed, first of all, declared that blacks were citizens of other people too, but it said, okay, blacks are citizens, former slaves, now you're citizens. And as citizens, you have the following rights and it went through a long list and said, full and equal benefit of all laws and proceedings.  So what does it mean to have full protection? And they listed some of the things but they also had an idea correctly that there was a need for protection for former slaves because what happened in the South was somewhat for civil is worse than they thought, but of course there was violence immediately aimed at former slaves and attempts to keep them in everything but slavery and not let them leave the plantations where they had been enslaved and so on. And that's what the 39th Congress was responding to, both in the statute I mentioned and in the 14th Amendment. And the court's scary to worry about protection because paternalism is a part of it and other things. And so we've just steered away from it almost completely. But if you go back to the point you made, Jay, why do we come into society from the jungle or the forest or wherever we came from? And John Locke was very influential theoretician but not high pollutant theory. He was read and understood certainly by framers of the constitution. He was a major factor, someone they read. Jefferson sent Madison John Locke so he'd be prepared for the constitutional convention.  That's why you enter society. And that makes some intuitive sense. So yes, the government is a correlative relationship, it says, and you have rights and duties and they go together and the state has some duties to protect you in your rights, which is actually what the 14th Amendment is largely about. And we talked about the First Amendment. Well, they have a duty to protect the freedom of expression, even if the crowd is hostile. They have a duty to protect the person who's pissed them off and make sure that the speaker doesn't get beaten up or killed or whatever. So it's a longstanding but overlooked part of what equal protection and what the 14th Amendment are about. Peters may be back. I'm sorry. Avi and I were talking about the protection part of the 14th Amendment and how security is a really important part of government. Government should protect us. And I guess where I get stuck on that is what we're talking about originally. Does the 14th Amendment, I'm sorry, does the Second Amendment provide a free society? Maybe then, because we didn't have, as Avi pointed out, a standing army or Peter, you pointed that out. And did we need it? Do we need the Second Amendment then? We need the Second Amendment now. It seems to me that protection against too many guns is more important now. We have a standing army for larger security issues. Why do we need it at all? The thing people always say when they talk about exceptionalism in this country is that this country has the ability to change with changing times. I would dispute that. I don't think we change fast enough. I don't think, for example, we've been fast enough about infrastructure and all our restructuraries old by decades, not just a few months. And the same thing with guns. Guns and violence has changed the country. It's made us less secure in our personal lives. But we haven't changed in favor of greater protection. We've changed in favor of less protection. Is the government, is the interpretation of the Constitution changing with changing times? Isn't there a complete disconnect on that, Abbey? Yes. Moving on to the next question. But Peter, Peter, I even invoked John Locke without you to correct me. Oh, thank you. I would hardly correct you except on who is starting the institution. Otherwise, I defer to you. But the Constitution- Do you want to pick up that one first? Sure. Sure. The Constitution, of course, has changed in interpretation over time. And to some extent, that's a good thing, right? So, classically, in there are many places one could cite, but Earl Warren or unanimous court in Brown versus Porter Education that we can't turn the clock back. We have to recognize what segregation means in this society right now. And it has effects on hearts and minds in a way unlikely ever to be undone. That was, I think, a good decision. Now, you can argue that black teachers lost their jobs, which is true in many other things. And it's certainly said in motion Southern resistance, which we're still paying for in many ways. Nonetheless, a good decision. And I think he was a bit wrong about what you could have found in the history of the 14th Amendment, but it was complicated. And history is complicated. It's messy. As I quoted Judge Abbey is saying, history is messy. It doesn't give you the kind of security and the psychological reassurance of, oh, it's all in the text. We'll just look at what the words mean, which is kind of silly, actually, but it is where our current court tends to be. Peter. So I think a couple of obviously existentialist questions. What is a free society? And I think other than the absolute stream of anarchism, the understood inclusion is freedom in a safe society. So it seems to me just as the comment at the well of Congress yesterday about, does the First Amendment cover an enemy video in which one person is clearly killing another? No, because that enemy and that expression, and Abbey can correct me again, is equivalent to yelling fire in a crowded theater. You can tell that there will be a lack of safety as a consequence of that fear. It seems to me that as Abbey suggested, all decisions have always been political. I think the problem now is that they are partisan. I mean, need to separate partisan from political. Make a political decision legally is to say like, justice randomized, there is a social context to this, times have changed. But clearly what has happened, and look at among many things about Trump being wrong, Trump was honest. I have appointed these justices. They are bound to my partisan view. I think that's the problem. And so what many people recognize, the majority of Americans recognize that there should be some gun control. It's like abortion, every single point, right? So the question is whether a partisan minority can overtake a majority and lead to an unsafe society. I think the case, regardless what you think about Kyle in Kenosha, what the prosecution said is really true.  And that's why I think the NRA argument really falls on its head. Increasing guns do not make that safe. You can't simply say then, I have the freedom to then bring an AR-15 to make society unsafe. All right, so we all, most people want an open society. Well, it's not everybody that's true. But I think we also want a safe society. So $64,000 question is, does a 17-year-old with an AR-15 make for a safe society, whether it's open or not? Well, let's talk about the future of the society just for a moment, Dobby. Some people think we're on the way to some kind of autocracy. And it isn't just Trump. It's the GOP, it's the new base. It's people who kind of like autographs because autographs can quote, get things done, end quote. So a free society may not be what we have, at least in the current understanding of what that means, going forward. How does the Second Amendment work in a society that is less than the free society we have that is more like an autocracy? How does the Second Amendment work in that case? Oh, I think that you're pointing to the, or underscoring what Peter just said, which is, if you start arming people, then other people are gonna get armed and this gets back to the Vera Institute study you were talking about before. That happens to be true and has been recognized for a long, long time and is recognized in most countries. We have a Wild West mythology and it's hard to get over our mythology. On the other hand, also as Peter said, you poll Americans and they are in favor of reasonable gun control. And Heller allowed for reasonable gun control. The court hasn't taken a gun case, so they've certainly been asked to for more than a decade. So that's what's really worrisome about this New York case and the fact that the court took it because they don't care about the popular majority. And indeed, for good and ill, the court has often stood up to the majority and it's called the counter-majoritarian problem and by Alex Bickel. This court is interventionist, activist all the time. And it seems on behalf of a certain agenda items that are high on the list for those who appointed and confirmed them. So we have a real problem. Yeah, I think it's highly partisan, it's highly partisan. I don't know if you've heard it, but my sister-in-law, Linda Greenhouse, was on a Terry Gross fresh air a week or two ago and she talked about the court in general. And one of the questions that came up that I'd like to ask you guys about is this. Is the court sensitive? And this goes to what you were just saying, Abby, to public opinion in general, or does it wall itself off from that and take the partisan approach because that's what put them on the bench essentially or that's what they are. But should the court be sensitive to public opinion? Because it seems terribly wrong looking down the bike that the court won't care, doesn't care. This was discussed on the Terry Gross fresh air show. It's troublesome to think the court doesn't care about public opinion and would go the other way and relieve most of us in the lurch. I know it's nothing we can do about that except maybe pack the court maybe.  Should they be more sensitive? What would you tell them to do? You go first, Peter. Okay, so I will go as the poorly informed citizen and then turn to the expert. I think there's still some value from Montesquieu of having an independent judiciary as much as possible. And that means, sure, you stick one finger out the window but again, one finger out the window in light of the larger issues we've been talking about. A free and open society as much as possible, honoring as much as possible the foundation principle, meaning that you don't bring ideology into it unless Bobby can correct me here. Unless really the Senate is allowed to ask about those questions. I mean, part of the difficulty I think in your answering question about the public is we all knew that this would happen. Both those who asked for it and those who did not ask for it but the Senate would not allow it to be discussed. I think previous decisions should be discussed. Previous views should be discussed. The court has to be somewhat, it's like, I think you can see from particularly Breyer's recent book tourer, he's very sensitive about this issue. But I also think unless you're gonna sequester judges like a jury, it's impossible. So I think though the final point is the sense of the public needs to be more open. What I find with this court is yes, each side says it's in the public interest, but each side is appealing to the silo view of their own public interest. And that's really, I think, a fundamental problem. There's no consensus about public interest. Your advice, Bobby? Well, I can give examples, I think, on both sides of this issue because we want the court to pay attention, but sometimes we want them to be independent. And so let me talk about a couple of cases from the same period. So when Dunkirk occurred is when the Supreme Court handed down its first decision about mandatory flag salute in the public schools. And Frankfurter wrote for the court and they said, yes, it's okay. That's the need for patriotism. Just a few years later, when the World War II was still going on, one of the best essays of all time written by Justice Robert, sorry, by Justice Jackson, is about the importance of not forcing what seems to be orthodoxy. Patriotism was still important. Now, maybe it looked better at that point. But Korematsu came down at the same time and Korematsu said, we're basically not gonna look at, we're not racist, we're just gonna uphold internment because of national security. That's what the experts say. So what did the public want in those three situations? Well, in the first one, I think they clearly wanted Jehovah's Witnesses not to be protected. And horrible things happened to Jehovah's Witnesses. A lot of violence of a really egregious sort. So was the court paying attention to the violence? Was it paying attention to the war? When Korematsu came down, people really knew that national security was not an issue. There's a big fight in the Justice Department as to whether to drop a footnote in a brief that said that. And I actually talked to someone who was clerking on the Supreme Court at that time. He said, we all knew, but they didn't think they could say it because the war was still going on. And then comes the Trump travel ban, which looked a lot like Korematsu in some ways. And the court just said, this isn't Korematsu. Korematsu has been overruled morally, but we don't have to overrule it legally. This isn't Korematsu. It wasn't or wasn't it with the travel ban? And Hawaii of course played an important role in providing standing in that challenge. Ultimately, the travel ban that was upheld was not nearly as bad as the first one. It was still pretty bad in the name of national security. And who knows where the public was as you had put it to a whole or a whole. You thank you for opening up a very important Pandora's box, which is what is has done during wartime. From Lincoln, of course suspended, maybe it's Corpus. And one of the problems with our constitutional system, which has generated hundreds and hundreds of constitutions, is it's not an organic system. So in Britain, for example, wartime measures can be more easily overturned than here. And I think that's a fundamental problem of having a single document. We're really among the first to do it. But Abhi, you're talking about very important cases in which allegedly there were national security interests. So should those national security interests though have a clock on them? Should a wartime measure, after the war is formally over, and we know war is due to continue, but at least the states are fighting, it would be an interesting constitutional question whether that expires. Let me return to the second amendment for a minute. We have no war. The abiding concern is the security of kids in high school, of toddlers in Sandy Hook. Yeah, I have to interrupt you just for a second, just for a second, because you and Abhi and I agree with that. But the other side, that's not, that's the issue. For them, it is a war. And they look at this as a war. I understand, I agree with that. But culturally, I think that we gotta at least recognize that for them, the other side, this is a battle. And why should not it be a battle? Let me just take a question from World War II then. Okay. Abhi, my question to you is, you are a constitutional lawyer who's been thinking about reading these cases, interpreting the constitution and the cases for a lifetime. And if you were in a room with those guys right now, to talk about their sensitivity to American values, their sensitivity to the future of the country, their sensitivity to public opinion, what would you advise them? What would you say to them? What would you advocate for in terms of their interpretation of the second amendment going forward? Well, one thing I would say, and it gets back to my point about what Scalia did to the second amendment text is you really should look at the text, but you have to be honest about it. And you look at the text in the context of context, not just because you look at five dictionaries and they are making a parody of looking at the text now and talking about syntax and telling us about the difference between adjectival and adverbial and so on. That doesn't capture why we care about the text, but the text doesn't answer the questions. There's a great saying by the founder of Reconstruction Judaism, Amor de Chai Kaplan. And he said, the past has a vote, but it doesn't have a veto. I think that's right. I think that's important, but I think that doesn't mean we ignore the text. And I've just finished co-authoring an article which went up on SSRN today, I think, which is about section two of the 14th amendment. And other people in my co-authors know a lot more about it than I do. But section two was saying, if a state interferes with the vote, they get their electoral college representation reduced. Now, this was in the context of the Civil War, hasn't been in vote for a long, long time, but it sits there as an interesting and important text which might keep us from state legislatures doing what they are now doing, which is to say, oh, we don't care what the vote was in the state, we, the legislature, get to select the electoral college representatives. Well, they don't. They want to, they have political clout. In some states, they have the majority for sure, but at least this text is a speed bump, if you will. You know, I can't help but tell you my original reaction when I went and looked at the text of the second amendment which we had on the screen. And we put that back on the screen for one more minute. My first reaction, Avi and Peter, was, you know, if you took this problem and you referred it to a first year law student at the William S. Richardson School of Law, they could have drafted it better. It is, in my view, not well drafted. If we could only go back there now and talk to those people. You agree, Avi? I mean, you're talking about looking at syntax and all that, it's not well drafted. That's true. And one of the things one learns in constitutional law quickly, I guess, is that at times there was what's been called purposeful ambiguity. Now, I don't think that's true of the second amendment, actually. I don't think it's so ambiguous, but other parts of the constitution clearly were compromised parts. Okay, Peter, it's time for you to summarize and thank Avi for coming down today. First of all, my apologies for the Zoom mishap, but Avi, thank you very much. Once again, as always, providing insight and also more than insight if you're own personal analysis and touch, which I think is really appreciated. You're one of the jewels of our community. So thank you very much. Jay, as always, he came up with a good question. So I look forward to what we're gonna discuss in two weeks. I don't know if we've answered anything, but I think if nothing else, going back to the title of the show, we've said history can't help but only so much. I think we're once again at that situation. We have to be honest with how we use the past. I think that's, particularly don't use the past as a catch-all. If you will, constitutional law can help, but only so much. And I guess if anybody and if any of my students are listening, watch where you put your comments. You're very careful about your comments. Oh, that's for a comma, right? Yes, they will come back to my chewing our collective talk. We are unanimous on that point. All right. Thank you, Avi. Thank you, Peter. Thank you so much. Everybody be well. See you.


Hello, and welcome to this session. This is Professor Farhad. In this session, we're going to look at the cost flow of inventory, a topic that's covered in a financial accounting course, as well as the CPA exam. As always, I would like to remind you to connect with me on LinkedIn if you haven't done so. YouTube is where you would need to subscribe. I have 1,600 plus accounting, auditing, tax, and a finance lectures. If you like my lectures, please click on the like button. It doesn't cost you much. Share them. Share the lectures, especially these days with the coronavirus, everybody's home. People are looking for some quality education, and I hope I can provide it. So please share the wealth and connect with me on Instagram and subscribe to the channel. If you are looking to supplement your accounting education or your CPA exam, check out my website. Before we start this session, I would just like to warn you that this session is going to be longer than my usual session. And the reason is I want to make sure you understand all four methods at the same time, because if we skip each, if we do a video for each method, it may not all connect. So it's the best that we do all these four cost flow method in the same video, which it could take up to 45 minutes. That's what I'm guessing, hopefully shorter, but I just want to make sure. So if you are tired, stop, stop, come back later and finish. Okay, so I just want to let you know upfront. So the first thing we're going to start with is an important formula that you need to have a good understanding about. And that formula is how the cost flow in terms of the inventory. First, we start with beginning inventory. So let's assume we are selling pens, pens, we are selling pens, and pencils, let's assume we are selling pencils and each pencil we're going to buy. And to make it easy, each pencil is a dollar, the cost of each pencil is a dollar. So let's have the data on the side. The cost is $1 per pencil. And we started the year with 500 pencils. So we started with 500 pencils when we opened the store. And obviously $1 a pencil will give us beginning inventory of $500. So we have 500 pencils. And I'm using the same number just to keep this just to kind of illustrate the concepts and $500. Throughout the year, we purchase additional pencils. And let's assume we purchase an additional 1500 pencils and for each pencil is for a dollar. And also keeping it for for a dollar on purpose to keep it simple for now to illustrate a particular concept. So we purchased an additional 1500 pencil and each pencil for a dollar. Now, what we started with is 500 pencils, then we purchased 1500, then we purchased 1500 pencils. Beginning inventory plus purchases gives us a new a new number called merchandise available for sale. So we had available for sale 2000 pencils throughout the year. And the dollar amount is obviously $2000. So notice I'm keeping it simple with the dollar amount. So this is what we started with. So we started with 500 pencils, we purchased 1500, we have 2000 available. And the price per pencil is a dollar. Therefore, we have 2000 pencils. At the end of the year, the company will take an inventory count. And that inventory count will determine how many pencils that we have left. And let's assume for the sake of illustration, we still have 300 pencils. In other words, we still have 300 worth of inventory. By knowing how much we have left, by knowing how much we have left, the the assumption is the remaining are not there. So the 1700 pencils. So the remaining is cost of goods sold. So there's an important relationship here available for sale, which is 2000 will have to be split between ending inventory and cost of sales, whatever I give to ending inventory takes away from cost of sales. So if I have 400 pencils left, it means I sold 1600. If I have 500 left, it means I sold 1500. Okay, now how much I sold them for that's a different story. Maybe I sold each pen for that $2 and 50 cent. We're not concerned about the selling price for now. So the important concept is available for sale is 2000. And this number will have to be split between ending inventory and cost of sales. That's a very important concept and accounting. I'm going to take a little bit further. There is a negative relationship or there is a zero sum game between those two account. What do I mean by negative relationship? If this one goes up, cost of goods sold goes down. If ending inventory goes down, cost of goods sold goes up. So whatever you don't have, whatever you don't have, if it's not an ending inventory, the assumption it sold, this is an important concept or an important equation for this chapter. And I'm going to go back and revisit this concept again and again as I work in the example. So make sure you understand this very, very much. Now, we're going to be using the perpetual inventory system and how does the perpetual inventory system work? Basically inventory affect both the balance sheet because when we buy inventory, we put the inventory on the balance sheet. When we sell the inventory, the inventory turn into cost of goods sold and we already learn about this. So this is basically the matching principle. Now, the way the inventory, physical flow of inventory works, it doesn't have to follow. The physical flow need not to follow the cost flow. What does that mean? Well, we're going to see what does that mean in a moment, but that's an important concept. Let's assume you are selling the first item that you purchased first. So it's this first and first out. The way you do accounting, you don't have to do accounting based on that, based on the physical flow. So if you're selling your inventory first in, first out, and we'll talk about this more, but in a second. So if you are selling the inventory, the first item that you buy, you sell first. Well, that's how the physical flow is happening. For an accounting perspective, when you account for it, you don't have to use this method. You could use another method. So you do have that flexibility and this is what's going to bring us to the new concept in this chapter is the inventory costing method. There are four inventory costing method to assign inventory and cost of goods sold because you will see that depending on the method that you use, you will find different ending inventory. So we either have the specific identification, we have something called FIFO, we have something called LIFO, and we have something called the weighted average. Now in the real world, FIFO is used the most because FIFO is how the physical flow of goods work. Generally speaking, companies would like to sell the first items first. So first in, first out. And this is why most companies use FIFO because that's how the physical flow works, but it doesn't matter. Even if you're using FIFO for the physical, you could use any of the other method for the other method. So make sure, up front, I want to make sure you're aware of that. So to illustrate this concept, the best way to illustrate this inventory cost flow concept is to work examples. Now I'm going to go over this slide very slowly. If you don't have the PowerPoint slides, please copy the numbers down because we're going to be using those numbers to illustrate all concepts. So we're working with A, we're selling bikes. And here's what's happening. When we start the beginning of the period, and the beginning of the period happens to be August 1st, we had 10 units, we had 10 bikes. And each bike, we pay for it $91. Therefore, we have $910. And it's an inventory cost. And we have 10 units in inventory. Then on August 3rd, which is two days later, we purchased 15 bikes. So we made another order. And we purchased them at 106. So this is a little bit different than my example. My example was I was buying pencils at $1. So it was easy. So you're going to see when you have a different dollar amount, you're going to see that you have to be very careful in how you do things. So you purchased 15 new bicycles, bikes at 106. So the price notice, the price of the bikes went up, and you invested $1,590. And now you have your ending inventory 25 units. 11 days later, August the 14th, you sold 20 bikes.  It doesn't matter what you sold them for. Now, if I ask you, which 20 bikes you sold? So which you sold 20, you have 25. Which 20 you sold because you need to cost them? Well, it makes a difference if you sold 15 of this and five of this. You could also sell 10 of this and 10 of this. So depending on which 20 you sold, it's going to determine your cost of goods sold. Basically, your selling is 20 times 130. That's easy. But what is your cost for that sale because you sold the 20 bikes? Well, some of them are 91, some of them 106. Which one did you sell? Well, it all depends on the inventory method that you are using, whether you are using FIFO, LIFO, or the weighted average. Therefore, we have to learn about those methods and copy this data down and we're going to work these assumptions. August the 17th, you purchased more units. You want to purchase more because, you know, you're down to five units. You purchased 20 units at 115. Again, now you're back to 25 units. Then you purchased 10 units at 119. You even purchased more. You're anticipating sales. Now you have 35 units. And as expected, you sold the 23 units. As expected, you wanted to sell more units. You sold the 23 units at 150 last day of the month, August 30th, August 30th. And you still have, since you sold 23, you still have 12 units. Now which 23 you sold? Because remember, you have 35 in total, which include bikes bought at different prices. Okay. So which 23? But regardless, here's what we have. In total, we had 55 units available for sale. So units available for sale. This beginning inventory, let me show you how we compute available for sale. Beginning inventory 10 plus purchase, plus purchase, plus three purchases, we have 55 units. And goods available for sale is beginning inventory plus all the purchases, 5,000, 5,000, let me change my pen here, 5,990. Remember, this number 5,590 will have to be split between ending inventory and cost of goods sold. So copy this number down because you're going to see it repeatedly. Also the 55 units, those 55 units, those 55 units, they will have to be split. They already told you how the split is. We sold 43 and we still have 12 units. So in terms of units, we're going to have an hour ending inventory 12 and we sold 43. So in terms of units, it's always going to be the same. In terms of the dollar amount, ending inventory and cost of goods sold, it's all going to depend on the inventory method that we are using. So now we're going to go ahead and illustrate those inventory method using this example. So if you don't have this example, take a picture of your phone and follow as I'm doing this. So we're going to, the first method we're going to be using is called FIFO, FIFO stands for first and first out. The reason I start with FIFO because it's the most intuitive because whenever you purchase first is you sell first. That's how most businesses do things. So first, the oldest cost, the oldest cost is sold first. So the oldest inventory is sold first. So it goes into cost of goods sold. So the recent cost, the recent inventory, it stays an ending inventory. So this is basically the idea behind FIFO. So your cost is old. Your inventory is no because it's the most recent you still have. So again, we're working with this example. So this is the example that you should have. This is the slide that I went over. Now let's start with FIFO. Remember, on this slide, you're going to have goods purchased, a column for goods purchased, a column for cost of goods sold, and the column for ending inventory, three columns. The first, remember August 1st, we had 10 units at $91. That's fine. On August 3rd, we purchased 15 units at $106. Now our inventory consists of two layers, one, $10 at $91, another 15 units at $106, so not $10, 10 bikes at $91, $15 bikes at $106. You have to keep those in chronological order. So the 10 units are first, you'll list them first, the 15 units are next, you'll list them next. And now the total amount invested in your inventory is $2,500. Now we're using FIFO. We sold 20 bikes on August 14th. Which 20 did we sell? Before using FIFO, we're going to sell those 10 first, so those are gone, and we're going to sell 10 of those. And of those 10, what's going to be left is five. So we sell 10 bikes in, with the cost of $91, we sell 10 bikes with the cost of $106. Now how much did we sold them for? It doesn't matter. Maybe we sold each bike for $150. It doesn't matter. It's not the selling price. We are keeping track of cost of goods sold. Now, so your cost of goods sold is $1,970 for this sale. This is your cost of goods sold. And you still have the five bikes with the cost of $106. You have to keep yourself organized here because the 10 bikes, let me, those 10 are gone. And what's left of the 15, what's left of those 15, what's left of those 15 here is only five. Okay? Now, you make another purchase. You purchase 20 bikes at 115. Remember, you're going to bring the five down because you still have those five bikes in your inventory. And now you have a new batch, 20 bikes at 115. Then, August 28th, you purchase an additional 10 bikes at 119.  You bring down the 20 because you still have them. And now you have an additional 10 bikes at 119. So your total inventory now is 4,020. On August 30th, you sold 23 bikes. The question is, which 23 you sold? Which 23 bikes you sold? Well, depending on the method that I'm using, I'm using FIFO. That means I sold those five are gone. And I need to sell 18 of this 20. So those five are gone. If 18, what's left of those 115 is two. So five at 106, the oldest one in 18 at 115. Now, my cost of goods sold for this sale is 2,600. And I still have two bikes at 115. And the 10 bikes that I purchased last, I still have. So notice, as I told you, we're going to have 12 bikes in ending inventory. So we still have 12 units. And those 12 units, they have a cost of 1,420. Our cost of goods sold consists of 1,970 plus 2,700 equal to 4,570. And we sold 43 units. You can count them. Notice 10 plus 1020 plus 5 plus 18, 43 units. So we sold 43. We still have 12.  We're going to repeat this number repeatedly, 5990. So this is how we do, we sell inventory using FIFO, first in, first out, the perpetual method. Now we're going to use the same example, we're going to use the same example using LIFO. LIFO stands for last in, first out, LIFO. What's LIFO? Well, last in, it means the one that you purchased last are sold first. So the recent cost, the recent inventory goes into cost, and the old inventory stays in ending inventory. So your inventory is old, but your cost of goods sold is recent. So this is recent or new, and your inventory is old. So this is the, this is the feature of LIFO. So again, we're using the same exact example for the same company. Now we're going to be using LIFO, last in, first out. Again, same thing. We started with 10 units at 91 dollars, then we purchased 15 units at 106. Again, make sure you keep yourself organized, the 10 unit comes first at 91, 15 units at 106. Then remember August the 14th, I sold at 20 units. Which 20 units I sold? Now I'm going to go and sell the 15 units first. So those are gone, and to fill the order, I need to sell five of those. So what I have, I still have five units at 91. So my cost of goods sold consists of the 15 units at 106, and the five units at 91. Now how much did I sold them for? It doesn't matter. I'm going to tell you I sold them for 150, it doesn't matter. So this is my first cost of goods sold for the 20 units. I still have five units at 91 dollars. Then I purchased 20 units at 115. I bring down my five, I still have those five bikes, and now I added more to it 20 new bikes. I even purchased more, then I purchased 10 bikes at 119. So I bring down my five, I bring down my 20, now I have another 10 units, 10 bikes. Now August 30th, I sold 23, 23 bikes. I sold 23. Which 23 did I sell? Well, I'm going to start from the bottom, last and first out. Those 10 are gone, and what's going to happen is I'm going to sell 13 of this 20. If I sold 13, I still have seven left. So I sold the 10 at 119 and 13 at 115. This is the cost. Now I still have the five unit at 91. My cost of goods sold for this sale is 2685. Notice I still have five plus seven equal to 12 units in ending inventory, with a cost of 1260. And my cost of goods sold, if I add them up, my cost of goods sold is 4730. So my ending inventory 1260, my cost of goods sold is 4730. And guess what? I'm going to do this computation, and if you add them up, they will add up to 5990. Notice I sold 43 units, and I still have 12 units. So it's the same concept, except it's given me different cost of goods sold in different ending inventory. Now we're going to look at this in terms of how does it affect your bottom line once we are done with this computation. So this is the second method. A third method is called the weighted average. Now what do we need to do under the weighted average? We all know what an average is. Average is the average number, basically taking the sum divided by the number of units. But this is a weighted average, and we're going to see what that means in a moment. Just I want you to remember this, you have to compute a new weighted average every time you make a purchase. This is important because students don't pay attention to this. If you are using the perpetual moving average, you have to compute a new average every time you make a purchase. When unit is sold, the average cost of, when the unit is sold, the average cost, whatever that cost is of each unit is inventory is assigned. So we don't care if it's first and first out. We don't care about this. All we care about is the new average. What's the new average? And we assign the new average cost to the sale. So how do we compute this? We're going to take cost of goods available for sale at any point in time, divided by the units on hand on the date of the sale. We're going to see how it works in a moment. Again, using the same exact example. So we're using the same data. That's why I keep showing you the slide to keep reminding you I'm using the same data. So first, first is, let's look at this one first. I have 10 units at $91. Remember, I start with this. If I ask you, what is my average cost? You would say $91. Now, the second thing, the second transaction for the month of August, I purchased 15 units at 106. Every time I have a purchase, I have to compute a new average cost. Remember, I have a purchase. I have a new average cost. Well, I have 10 units at 91 plus 15 units at 106. Now, the first thing you want to make sure, your average, it's going to be in between those two figures. So your average cost has to be between 91 and 106 and closer to 106 because you have 15 units at 106. How do I compute this? How do I compute this? $10 times 91. That's $910. $15 times 106 is $1590. So $910 plus $1590. My total cost available for sale is $2,500. That's my dollar amount. And I have 25 units. I will take my dollar amount, $2,500 divided by 25 unit. And my average cost is an easy answer of $100. So my average cost now is $100. After I make my next, my second purchase, I computed my cost. So I have $2,500. My average cost is $100. Now, I keep using this average cost until I make a new purchase. Now, August the 14th, I made a sale. It doesn't matter which unit I sold. I sold the 20 units. My average cost is $100. So now my cost of goods sold is $2,000. I still have five units at an average cost of $100. So it doesn't matter which one I sold. I'm going to be using the average cost. Let me erase everything on the screen and show you how I did the computation. So $2,500 divided by 25. So I don't care which five units I sold. And I still have five units at $100. Now, let's see what happened next. What happened next is I made a new purchase. Remember, I had now five units at $100. Then I made a new purchase. I purchased 20 units at $1,500. I have to do the same computation. So I have five units. My pen is acting up. I have five. I have five units at $100, which is equal to $500. And I have 20 units at $1,15, which is equal to $2,300. Now, my dollar amount is, sorry, my pen is not working properly, but the numbers are on your screen. So I have $2,800 in terms of dollar amount, and I have 25 bikes. When I take the average, $2,800 divided by $2,500, it's going to give me a new average cost of $1,12. Now, my new average is $1,12. Now, I don't care what I have the first and first out. I have 25 units, 25 bikes with an average cost of $1,12. And remember, notice the average cost has to be between $100 and $1,15. It is $1,12. So in case you want to double check your math, again, this is the computation on your screen. $2,800 I have in total cost of goods sold. I have 25 units in total inventory. $1,12 is my cost. Okay. This is how I did the computation. Part three, I made another purchase. I purchased 10 additional units at $1,9. So I'm going to show you the computation and my average cost will be $1,14. Every time I make a purchase, I compute a new average cost. Now, my inventory is my cost available for sale is $3,990. How did I know this? Well, it's $2,800. Then I added $1,190. That's $3,990. And I have 35 bikes. Now, my new average cost is $1,14. Now, I sold. The next thing I'm going to do, this is a detailed computation of I came up with $1,14. Now, I sold. Remember, I sold 23 bikes. It doesn't matter which 23 I sold. My latest average is $1,14. So this is my cost of goods sold for this transaction. I still have, if I had 35 sold 23, I still have 12, which I should. And my average cost is $1,14. Therefore, ending inventory is $1,168. Cost of goods sold is $4,622. And if you add those two figures, they will add up to $59. If you add them up, they will add up to $5,990, which is the goods available for sale. Total of goods available for sale. So this is the weighted average. This is the weighted average. And this is a summary of the weighted average. If you're going to look at the summary, again, this number plus this number equal to $59,990. And you're going to see why I keep repeating this, because it's very helpful for you. And this is the detailed computation in case you want to go back and view the computation. Again, last method is the specific identification method. The specific identification method is a method that can specifically identify which unit you sold. So you're not saying first and first out, you're not taking the average. What you are doing in this method is you are identifying somehow each unit is tagged by a serial number, by something that you can track it with. And this is the most expensive method to use, because now each unit of your bikes or each unit of your product has to be tagged. Now, in order to complete the specific identification, you have to be told. So for example, when you sold those 20 units, they have to tell you, for example, you could have sold 13 of those and 7 of those, or you could have sold 12 and 8. You could have sold 10 and 10. So under this specific identification, you have to be told which unit you have left or which unit you sold. You have to specify. So on the problem, they have to specify. So here, I'm going to solve the problem by telling you exactly what did we sell or what did we have left in ending inventory, but under the specific method, you have to be told. So to illustrate the specific identification, remember we had 59.90, the total goods available for sale. You remember, I kept using this number, is because this, when we sold the 20, you remember on August the 14th, we sold 20 units. We sold 8 for the 91 and 12 for the 106. This was the combination. So we went and we selected those 8 bikes that we purchased them for $91 and we selected specifically those 12 bikes that we purchased them at 106. On August 30th, we sold 23 bikes. Here's what we did. For the 23 bikes, we, for the 23 bikes, we sold the two units at 91. So the 91 are gone. We sold the three units at 106. We sold 15 units at 115 and three units at 119. So again, we went in there and we selected which units specifically we took out. So our total cost of goods sold is $25.82. Now, well, total cost of goods sold for both sales is $48.50. If I take goods available for sale, remember goods available for sale will have to be split between ending inventory. This is $5.09. Remember, 59.90 will have to be split between ending inventory and cost of goods sold. Now, I know my cost of goods sold is $4,500 and $82. My ending inventory must have been $14.08. They could have also gave you ending inventory is $14.08. They could have told you, you know, you're using the specific identification and you still have those units and they have a value of $14.08. The 12 units have a value of $14.08. Remember, because we still have 12 units and we sold 43. If they gave me the $14.08, I can find cost of goods sold. So under the specific identification, first know what's your total, which is goods available for sale, and they'll either have to give you the ending inventory or the cost of goods sold. Now, let's take a look at the financial statement effect of cost and goods. So let's see. First and first out, ending inventory, if you're using first and first out, the advantage of it is your ending inventory represent your current cost because your old inventory is gone. You still have your new inventory. This is an advantage of first and first out. LIFO, the advantage for LIFO is the cost of goods sold on the income statement approximate the current cost. So the cost of goods sold is most recent. Therefore, it's showing the most recent cost. Now, the disadvantage is the opposite. The disadvantage is the opposite. Under LIFO, the disadvantage is your cost of goods sold is old. Under LIFO, the disadvantage, your inventory is old. This is the disadvantage. And obviously, the weighted average is in between. Smooth price is out. Let's give you the average. Now, let's take a look at the bottom line. Basically, let's take a look at the bottom line. So here, we are using the same scenario and we sold those 43 bikes for 6050. So this is the selling price. Okay, so this 6050 is the selling price. And notice we have the specific identification, LIFO, LIFO weighted average. Okay, now let's take a look at the specific identification. Under the specific identification, cost of goods sold was 4852. Sales minus cost of goods sold gives you gross profit, minus operating expenses equal to income before taxes, minus taxes will give you net income, net income is 713. So under the specific identification, your net income is 714. And you still have inventory of 1408. Remember, if you add those two numbers, the blue numbers, they're going to give you 5990. I'm not going to do this, but you can do it. Under LIFO, your sales is the same. Your cost of goods sold is 4570.  So notice your net income is higher under LIFO. It's 721. Under LIFO, your net income is 609. Under weighted average, your net income is 685. It's the same company, but if they use a different inventory method, it's going to give them a different bottom line, different bottom line. So this is what I'm trying to show you here. Now, if you are the owner of this company, if you are the owner, which method you would prefer if you are the owner of the company? Well, if you are the owner of the company, you would prefer to use LIFO last and first out. You might be asking, hold on a second, but LIFO gives you the smallest profit. Yes, it gives you the smallest profit. It also gives you the smallest tax bill. As the owner, you're interested in saving on your taxes. It gives you the smallest tax bill. Okay. If you are the manager of this division and you want to, and your bonus depending on net income, you would use LIFO. Why? Because it's going to give you the highest net income. Now, what I want to show you is this. When prices are going up, this is what will happen. When prices are going up, remember when we were buying, when we were buying those bikes, the prices after each purchase, it was going up. Each purchase, the prices were going up. As the prices go up, if you're using LIFO, it's going to give you small profit. And if you're using LIFO, it's going to give you a large profit because you are matching old, low prices with new sales. And the opposite is true. If the prices of those bikes were going down, if the prices of those spikes were going down, LIFO is going to give you the large profit and LIFO will give you the small profit. Okay. The way that average is always, it will be someplace in between. Now, since we talked about taxes, I just want to make sure you're aware of a rule that you have to use. The IRS requires that when LIFO is used for tax reporting, it must be used also for financial reporting. So simply put, if you're using LIFO for tax purposes, if you're preparing your taxes and you're using LIFO, why do you use LIFO? Remember, if prices are going up, it's going to give you the lower tax bill, lower tax bill. So if you are using LIFO to lower your tax bill, that's fine with the IRS. However, when you prepare your financial statements using GAP, you have to also use LIFO. So you cannot have a low tax bill, then go to GAP and use LIFO and have a high profit. You cannot have the best of both words. If you're using LIFO for tax, you have to use LIFO for financial. This is called the LIFO conform material. Simply put, if you're using LIFO for one, for IRS, you have to use LIFO for financial. Now, if you're using LIFO or some other method for tax purposes, you could use any method for financial, for GAP, but only LIFO for tax. If you're using LIFO for tax, they restrict you. And basically, this is it. If you like this recording, please like it, share it, subscribe. In the next session, I would look at lower of cost or market. Remember, I do have additional resources. If you're studying for your CPA exam, or if you want to supplement your education, check out my website, Study Hard Accounting is worth it. Good luck and stay safe.


It's actually really good. I just get satisfaction from destroying beautiful things like friendships Does that make me an unstable sociopath? That's for my psychiatrist to know and me to find out So here's the first shot we're gonna compare it was shot on portrait 400 in Kathmandu, Nepal at box speed So let's go back find the physical negative load it into our scanner and crack open Epson scan For your reference, I won't be making any color or levels adjustments to any of the scans I'll just keep the images as the default scan that the program gives me because any adjustments after that point kind of just becomes subjective You'll see here in a silver fast since this shot was on Kodak portrait 400 I'll use the preset portrait 400 profile And lastly negative lab pro which does things a little bit differently as it needs to be scanned as a positive So you get an image that looks like this that the plug-in itself will later flip in light room after white balancing This is the image that is initially prepared on the default standard preset in negative lab pro so again no adjustments So here are all of them compared to one another So right off the bat the colors are quite a bit different Silver fast and negative lab pro are pretty similar They seem to have a bit of a yellow cast which I'd say the Epson scan doesn't really have The silver fast scan definitely has more contrast than either of them And because of that it naturally pushes out some of the shadow detail What's interesting to me is uh the negative lab pro and the Epson scan both have nearly identical Contrast or latitude, but the negative lab pro scan is a lot more saturated Let's take a look at another example. Here's a comparison of a landscape shot I shot many years ago on ektar 100 which is dead. It's not discontinued.  Here is a color negative night shot from a yet to air video shot with my memia 7 with cinestal 800 t So the epson scan definitely came out the flattest to where we can really see the grain Silver fast again has more contrast, but way better colors I think negative lab pro looks like a lot more exposure was applied to the brights of the image But the colors are solid in my opinion Now that's all great And you may already have a program in mind that you think produces the best results But sometimes these programs will give you s*** results if you're scanning an image that's backlit or has mixed lighting in frame Let's use this example of a backlit scenario of kale playing on his game boy instead of enjoying nature Shot on my contacts t2 at box speed and also this photo of sunrise for mixed lighting Epson looks like it came out Kind of flat again the colors on silver fast are definitely more accurate. I think for some reason I like the negative lab pro scan the most Those blues are turquoise as s*** though. So that would need to be something that needs to be fixed now. Let's do mixed lighting Here's the final edit for reference Again, I think silver fast nailed the tones to real life Negative lab pro definitely has a greenish cast like it got a mountain dude pre wash in development And epson scan kind of just looks like swamp ass in my opinion Okay, so let's take a look at some black and white photo scans and see if there's a huge difference between them So here's a shot of a gas station in iceland taken on hp5 on the contacts t2 So for once silver fasts actually calm the f*** down and actually seems to have less contrast than the epson scan The negative lab pro scan seems to want to brighten the sky quite a bit for some reason I think the epson scan actually nailed this one Let's try out another black and white image. Here's a different black and white shot of some downtown la skyscrapers taken on camp mere 400 Once again, it looks like silver fast rendered a flatter image somehow, especially in the highlights Negative lab pro seems to have the most contrast So that's it. That's all I got for examples My overall thoughts epson scan actually seems to be quite good for black and white work But the color negative scans are kind of bland and flat in my opinion silver fast is not a bad option I actually quite like the look it gave to some of the shots I think the color algorithm that it uses is probably the most accurate overall worth mentioning though I kept getting errors on the epson scanner But only in silver fast for some reason silver fast also made me purchase another license Because I changed scanners So just a heads up, I guess negative lab pro definitely has some crazy colors a lot of the times But at least it's pretty consistent in my opinion the scan process for negative lab pro is definitely longer overall So which one do I use you ponder as the mystery deepens? You've probably already figured out my bias at this point these days I've been using none other than negative lab pro for all of my my work because frankly I feel like it takes all my stupid boring shots and has another level of pop and range to them Especially if you know what to look out for and you can correct for it I might be like I like negative lab pro quite a bit. But why is it $99? I could buy 99 things off the dollar menu for that price. Well, the good news is you're free to use whatever program you want negative lab pro isn't paying me money or sexual favor coupons to endorse them But consider this the plugin itself is built in the light room Which is really convenient and as far as I know it's just one guy who makes it Probably in his dorm room at harvard after his girlfriend broke up with him Additionally negative lab pro still gets updates every now and then and I can only assume it'll continue to get updates into the future You know at least until it becomes sentient and tries to wipe out the youtube film photography Avengers At some point in the future it might be cool to try other programs like view scan But I'm pretty happy with the pipeline that I have going right now. So why change it? So that's that I hope that this video was at least a little informative And at the very least provided a little entertainment during this crazy time until next time You can find me eagerly watching the news in quarantine waiting for the first zombie to appear. See you guys


development of surfaces which are non-developable or oblique. So, these are the surfaces that you cannot cut and lay down flat on a piece of well lay down flat on a plane. So, we need to pursue or follow some tricks in this. So, that is on development keep that in mind. So, let us look at this sheared hexagonal pyramid the top view shown and so is the front view it is kind of sheared. So, what you do is you actually have your solid like this you just kind of shear the top surface with respect to the bottom surface that is how this solid is and we would like to develop it. Step one in development always look for true lengths true shapes because unless you do that it will be difficult for you to develop any solid. So, you got how many edges 1 2 3 4 4 that you see and 2 are behind. So, 1 2 3 and 4 5. So, these are the edges that you see and then 2 edges are behind these 2 edges. Can you identify edges in true length if. So, which ones are those which ones are those come again 6 5. So, this is true length because this projection is horizontal what else 6 7 6 7 well that is in true length also because horizontal horizontal once again any other 1 8. So, you see this projection and the corresponding projection for this is horizontal over there. So, you have a bunch of edges which are in true length and if you want to develop this how would you want to go about this how would you want to go about developing the surface well start with the hinge line. You know that edge 1 8 is in true length and if you kind of cut your solid let us say at this edge if you cut this solid at edge 1 8 and open it up open it up perpendicular to this. This is how your vertices 1 2 3 4 and 5 6 7 8 will appear they will be appearing on these corresponding projections. So, once again scissor this edge open this surface out these vertices are going to be appearing on the respective projections. So, once you have figured these projections out start with edge 1 8 and follow the connectivity 1 8 is connected to what. So, 1 is connected to 2 8 is connected to 7 2 and 7 they are connected. So, follow this connectivity in from both the views from 8 what do we have 7 and this length is the same as this length right and this length from 1 what do we have 2 and this length is in true length of course. So, you got 2 here got 7 here 2 and 7 are connected and keep going forward 2 is connected to what 3 2 3 and 7 is connected to what 6 alright. So, you can figure the 2 lengths of 7 6 and 2 3 keep going forward because 6 7 is going to be in true length both the projections are horizontal and. So, on this is a relatively trivial example 1 8 to 1 8 fine relatively trivial example nothing very rocket science about this alright or weird looking cone what about the what about the what well yeah. So, if you if you want to consider this to be an open solid just the surface then you do not have to worry about the ledge, but if you want to consider that to be yeah. So, weird looking cone the apex is shifted not marginally, but really in a weird fashion and we would like to develop this. Now, is it possible for you to develop this weird looking cone the same way as you would develop a regular cone is it possible once again is it possible for you to develop this cone the same way as you develop a regular cone. Yes, assuming that is not possible for you to develop this surface you know in a regular fashion what you do you approximate the surface and the way to approximate the surface is via triangulation it is possible to develop the surface accurately may be not. So, you need to go for approximate development and the way to that is to triangulate the surface and this is how divide the base into equal number of paths label these vertices 1 to 12 and draw generators from each of these vertices to join the apex O. So, project those vertices down on to the front view the apex over here of the cone is O join each of these vertices to that apex. So, the surface of this weird looking cone is now approximated by a bunch of triangles on the surface of this solid source P. To develop this cone now implies how you treat these triangles now I am the same procedure try to figure the two lengths or two dimensions from both of these views. So, we will be needing a true length diagram to figure out the two lengths of these edges 0 1 0 0 2 0 3 up to 0 12 and of course, 1 2 3 4 5 6 7 8 and so on and so forth. Now, look at this segment here 8 9 not the arc, but the segment line segment would that be in true length how about 6 7 would this be in true length. So, in fact all these line segments joining these vertices they will be in true length because the corresponding projections in the front view are all horizontal right step 1 fetish clear. Step 2 how do we figure the two lengths of 0 1 0 2 0 3 up to 0 12 is what the question is and for that we need the true length diagram. Now, look at 0 1 and look at the corresponding projection in the front view is that in true length look at 0 7 and look at the corresponding projection of 0 7 in the front view is that in true length 0 1 is in true length and 0 7 is in true length well start with a right angle triangle that I have drawn over there to find the true length of the rest of these segments what you do method of rotation right. So, rotate 0 2 to lie on the horizontal take its projection down or measure this length take its projection down over here or what you could do is you could transfer this projection over here directly and this is 0 2 in true length likewise 0 3 measure this length transfer it down here and join vertex 3 to 0 and that will give you the true length of 0 3 and. So, what the same procedure for 0 4 0 5 0 6 simple method of rotation measure these guys transfer them on to the true length diagram that is in true length that is in true length that is in true length and that is in true length all right. So, once you have the true lengths of 0 i's where i goes from 1 to 12 and all these other guys you can start developing this surface and this is how start with 0 7 draw a knock with radius the same as 7 8 or 7 6 depending on which side you are developing. So, if it is 7 6. So, this distance is the same as this distance and then to get this length you need to choose what distance from here up till here yeah 6 fixed number 5 with this distance cut an arc and with 0 5 cut another arc with this pointer center 5 located and continue yeah. So, this is not a true development, but an approximate development and the way we did that the way we perform this development is through triangulation we approximated the surface of a solid by means of a bunch of triangles by means of a set of triangles as simple as that all right and everybody with me everybody with me first example of the method of triangulation. So, if you remember our discussion last time on Tuesday you go for parallel line development in case of cylinders prisms etcetera those kinds of surfaces solids you go for radial line development in case of cones pyramids regular solids cones pyramids and you go for triangulation for other complex or non developable surfaces like in the previous example. As I said last time they all some way all the other involve determination of true lengths and true shapes without that you cannot do anything this is another pre interesting solid the front view given the top view given yeah this cross section is circular this cross section is rectangular or square. So, this surface is actually a blend between the circular cross section and a rectangular cross cross section can you imagine this all right a linear blend between two different shaped cross sections. How do we develop this how do we develop this triangulate no that is manufacturing that is not developing you are far ahead of me first means you develop this and then in your ta 201 if you get a chance to make this then make that yeah. So, we triangulate the surface it is a non developable surface we triangulate that and the way we do that as we divide the circular cross section to bunch of paths and we actually work with the four vertices of this square and we join these vertices in such a way that we get triangles approximating the surfaces over here and the surfaces over here look at the way I am joining the triangles now I am joining these vertices to get the triangles you follow the red lines bunch of triangles easier to work with the top view just transfer the triangles on to the front view all right.  So, triangles 11 3 4 11 4 5 5 6 12 6 7 12 7 12 9 7 8 9 1 8 9 1 9 10 so on so forth they all approximate the surface transfer the vertices on to the front view and transfer the connectivity as well on to the front view ok. The trick is or the notion is to work with as less number of triangles as possible ok, but necessary enough number of triangles that would allow you to develop this surface properly. So, you do not want to compromise on the shape of the surface what do we need next the two lengths for that we need the true length diagram notice that all these green edges they happen to be true lengths yeah how about the rest what you have to say about the lengths of 8 9 2 10 11 4 6 12 are they the same are they the same. So, just what same, but yeah of course, well the true lengths of these edges will be the same won't they the true lengths of these edges 2 10 4 11 6 12 and 8 9 they would be the same and likewise the true lengths of 1 10 1 9 9 7 7 12 12 5 5 11 11 3 3 10 they will all be the same. So, we need to find the true lengths of only a set of lines and we will be happy with that now all right all greens in true lengths that is ok need to determine the true lengths of edges like 1 9 2 10 and 1 8. So, I am going to be preparing my true length diagram over here length 9 10 is in true length length 9 10 is in true length yeah to get the true length of 1 9 I would rotate this projection of 1 9 in the top view. So, that this projection becomes horizontal and then I would project that down onto the front view and this length 1 9 will then be my true length method of rotation as simple as that to get the true length of 2 10 I would rotate 2 10. So, that 2 10 becomes horizontal. So, this guy here I have rotated it about vertex 9 this guy here I would rotate it about vertex 10. So, 2 10 becomes horizontal I will take the projection down cell phones off please I take that projection down and 10 sorry 2 is here all right. So, this guy here that would be my true length 2 10 what else am I left with 1 8 1 8 is already in true length I do not need to worry about that. But, if I still want to figure out the true length of that I rotate 1 8 about 1 take its projection down and this is my true length 1 8. So, once I have the true length of all the edges all these triangles that approximate the surface I am ready to develop the surface pick a compass pick a pencil and get started start with 9 10 and of course, when you are developing make sure that you are following the connectivity here and here following the topology right 9 is connected to what 9 is connected to 8 9 is connected to 1. So, which triangle am I going for first I start with 9 10 I start with 9 10 I will go with 9 1 and I will go with 10 1. So, this triangle is something that I have now on my 2 dimensional plane yeah 9 10 9 1 1 10 which triangle now perhaps 1 2 10. So, with 1 as the center 1 2 as the length draw an arc with 10 as the center 10 2 as the length draw another arc you will get triangle or you could go with 1 8 9 1 8 9 is here same thing. So, you have what x 9 here with this length 8 9 with 9 as center draw an arc with this length 1 8 with 1 as center draw another arc you will get 8 and keep on following this procedure we get 1 2 10 make sure that you are following the connectivity right 1 2 10 and then next triangle would be 2 3 10 and the next 1 will be 3 10 11 next 1 3 4 11 and then 11 4 5 keep on continuing this is straight forward. So, the challenging part for you is this two length diagram and understanding the file that you have to approximate a non developing surface using a set of triangles yeah you cannot, but cutting out a circle is not a problem, but your question has a context what is the context yeah not the sheared well sheared cone yes yes yes yeah well the accuracy of development will depend on the number of triangles you use to represent the surface the more the number of triangles you use the better the accuracy of this development will be again. So, merely cutting out a circle out of a piece of paper is not a problem right. So, if you just want to cut this circle out from a piece of paper perfectly fine, but if you are wanting to cut this circle with reference to the entire surface around it that is the context. Now, look at all these vertices lying on the circle 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8. And then you have to of course, have one more triangle over here I think yeah right. So, these guys where would they lie. So, if you if you close if you glue this 9 8 if you glue this 9 8 with that 9 8 and if you kind of close the surface all those guys they will be approximating a circle from this example yeah. So, my point is if you want. So, if I understand your question correctly if you want this part of the surface to be a precise circle is this what you want is this what you want. If you want this part of the surface to be a precise circle you will have to have more number of points approximating that circle and then well I mean you have to account for those points by means of triangles. Those points on this circular curve over here they have to participate in triangles they have to be a part of the triangles thinking and analyzing ends well you have lab number 13. And then you have your exam it better not end and even after this course your thinking and analyzing should not end C for M for did you say M for midsims M for marks M for money M for what math C for this is Brahmagyan Brahmagyan nothing to with T a but everything do with thinking and analyzing that I will share with you. If you want to take it take it if you do not want to take it fine C for contentment satisfaction one word that each and every one of you is looking for throughout your life yeah does anybody disagree C for contentment C for currency money many few guys think the more money you have in your pocket the more content you are is that true louder not true but still trust me once you are in your fourth year you are going to be going for companies were going to be paying you higher which you should not you should be going for companies that of you jobs of your choice C for choice your choice that is where things change the more choices you make the more confidence you get C for confidence the more choices you make the more confidence you get in life the more compromises you make compromises would be like without you wanting to do something you are forced to do something some way or the other the more compromises you make the less confidence you get two factors which are going to be important throughout your life after your 26 or 27 may be later carrier C your spouse your companion C your life will revolve around these two factors you choose the right carrier your content you choose the right companion your content you choose the wrong carrier you choose your wrong spouse or companion C words children direct source of contentment look at a one year old you like to hold him or hold her in your hands yeah see for college you can figure out a bunch of C words that if you cogitate about if you think and analyze and this is why perhaps subconsciously I name this course think and analyze 101. So, if you think and analyze about these bunch of C words you will see how these words might change your life later on keep intruding finally, you always say you know the party is not good they are doing no it is a democratic country I can say whatever I want well within limits. So, you guys tend to censure people you guys tend to blame people you know for things which are not right around you guys want to change C word you guys want to change for things to be better around you are the change you take a right step forward and the world will follow you do not wait for the world to take the right step forward and then you follow the world the other way around you take the right step forward and the world follows from again impressed imbibed taken in all right. So, with that said lab number 13 is on your exams are on on the 26th 9 to 1 a single minute late doors are closed keep that mind for both badges no sharing of equipment information anything during the exam or in between when the badges are getting or when the badges are in transition anything else was a pleasure teaching you and for that thank you in advance.