The correct answer is: A. LIFO method.
Under the LIFO method, the last items purchased are the first items sold. This means that the value of closing stock will be based on the cost of the oldest items in inventory. In an inflationary environment, the cost of older items will be lower than the cost of newer items. Therefore, the value of closing stock will be highest under the LIFO method.
The FIFO method, on the other hand, assumes that the first items purchased are the first items sold. This means that the value of closing stock will be based on the cost of the newest items in inventory. In an inflationary environment, the cost of newer items will be higher than the cost of older items. Therefore, the value of closing stock will be lowest under the FIFO method.
The weighted average method is a hybrid of the LIFO and FIFO methods. It assumes that the cost of each item in inventory is a weighted average of the cost of all items purchased. In an inflationary environment, the value of closing stock will be somewhere between the value of closing stock under the LIFO and FIFO methods.
In conclusion, the value of closing stock will be highest under the LIFO method, lowest under the FIFO method, and somewhere in between under the weighted average method.