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- Topic: An inventory question
| Author | Topic: An inventory question |
|---|---|
| ajayd @2015-02-07 14:43:10 |
This question is lifted straight out my ebook Moore Ltd. uses the LIFO inventory cost flow assumption. Its cost of goods sold in 20X8 was $800. A footnote in its financial statements reads: \"Using FIFO, inventories would have been $70 higher in 20X8 and $80 higher in 20X7.\" Moore’s COGS if FIFO inventory costing were used in 20X8 is closest to: A) $810. B) $730. C) $790. Your answer: A was incorrect. The correct answer was C) $790. The ending LIFO reserve is $70 and the beginning LIFO reserve is $80. FIFO COGS = LIFO COGS − (ending LIFO reserve − beginning LIFO reserve) $800 − ($70 − $80) = $790 ———> look here. 800- (70-80)=790? Am i looking at this right? 70-80=-10, 800- (-10) is 810. right? |
