Answer:
During a period of rising prices, the inventory valuation method that produces the lowest reported net income is the First-In, First-Out (FIFO) method.
The FIFO method assumes that the first units of inventory purchased are the first ones to be sold, and the ending inventory is made up of the most recently purchased units. In a period of rising prices, the cost of the most recently purchased units will be higher than the cost of the earlier purchased units. Therefore, using the FIFO method will result in a higher cost of goods sold and a lower net income, as compared to the other inventory valuation methods.
In contrast, the Last-In, First-Out (LIFO) method assumes that the last units of inventory purchased are the first ones to be sold. This method tends to result in a lower cost of goods sold and a higher net income during a period of rising prices.
It is important to note that the choice of inventory valuation method can have significant impacts on a company's financial statements and tax liabilities, and companies should carefully consider the implications of each method before making a decision.