A physical inventory on december 31 shows 2000 units on

Reference no: EM13607282

Holliday Company's inventory records show the following data:

Units Unit Cost

Inventory, January 1 5,000 $9.00
Purchases: June 18 4,500 8.00
November 8 3,000 7.00

A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used?

$800 additional taxes
$4,000 additional taxes
$3,200 tax savings
$4,000 tax savings

Reference no: EM13607282

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