Purchase Solution

FIFO and LIFO

Not what you're looking for?

Ask Custom Question

A company has been using the FIFO cost method of inventory valuation since it was started 10 years ago. Its 2003 ending inventory was $90,000, but it would have been $70,000 if LIFO had been used. Thus, if LIFO had been used, this company's income before taxes would have been
a. $20,000 less in 2003.
b. $20,000 less over the 10-year period.
c. $20,000 greater over the 10-year period.
d. $20,000 greater in 2003.

Purchase this Solution
Solution Summary

The solution calculates net income before taxes for LIFO method of inventory valuation.

Solution Preview

Answer:
a. $20,000 less in 2003.
If LIFO had been used cost of goods sold in ...

Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Operations Management

This quiz tests a student's knowledge about Operations Management

Introduction to Finance

This quiz test introductory finance topics.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

View More Free Quizzes
Related BrainMass Solutions

  • FiFO and LIFO Inventory

    This solution illustrates how to compare the FIFO and LIFO values of inventory and the reported net income under each method. All steps are shown.

  • Cost Flow Methods: FIFO and LIFO

    507422 Cost Flow Methods: FIFO and LIFO Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement?

  • Inventory calculations in Financial Accounting

    FIFO Ending Inventory $ 1221 LIFO Ending Inventory $ (b) For both FIFO and LIFO, calculate the sum of ending inventory and cost of goods sold.

  • Compare FIFO and LIFO

    280485 Compare FIFO and LIFO When FIFO and LIFO are compared, a. LIFO yields a higher net income during inflationary times than FIFO. b. FIFO yields a lower balance sheet value for ending inventory than LIFO during periods of inflation. c.

  • FIFO vs LIFO

    501915 FIFO vs LIFO 1. Inventory and cost of goods sold figures prepared under the LIFO cost flow assumption versus the FIFO cost flow assumption can differ dramatically. a.

  • Maxwell Corporation: change from LIFO to FIFO.

    LIFO and FIFO In 2004, Maxwell Corporation changed its method of inventory pricing from LIFO to FIFO.

  • Inventory method that results in current costs income statement

    FIFO LIFO B. LIFO FIFO C. FIFO FIFO D. LIFO LIFO Please explain your answer. Current costs imply the latest purchase cost.

  • Financial Accounting : FIFO and LIFO Applied

    12641 Financial Accounting : FIFO and LIFO Applied Please see the attached file for the fully formatted problems.

  • FIFO/LIFO

    The solution discusses FIFO and LIFO.

  • Financial Accounting : FIFO and LIFO

    12638 Financial Accounting : FIFO and LIFO Please see the attached file for the fully formatted problems. Compute inventory and cost of goods sold using FIFO and LIFO.

View More Related Solutions