Solution-What is the effect on the company cost of goods

What is the effect on the company cost of goods sold

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Reference no: EM132601375

Question - You are provided with the following information for the inventory items of a firm. This company reports its inventory using LIFO.

Item	Cost	NRV	NRV Less NPM	Replacement Cost
A	$40,000	$50,000	$17,000	$24,000
B	10,000	8,000	9,000	6,000
C	15,000	10,000	12,000	14,000
D	25,000	35,000	40,000	30,000
E	45,000	40,000	30,000	18,000
F	30,000	32,000	22,000	24,000

Instructions -

(1) Using your knowledge of accounting, how much should this company's inventory be reported at for the current period?

(2) What is the effect on the company's cost of goods sold account, if any?

(3) The financial manager believes that whether a company uses FIFO, LIFO, or weighted average, inventory should always be reported at cost since this provides the most accurate representation of the company's inventory account. Do you agree with this statement? Why or why not?

Reference no: EM132601375

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What is the effect on the company cost of goods sold

Reference no: EM132601375

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