9 when comparing a US company that uses the last in, first out (LIFO) method of
ID: 2703534 • Letter: 9
Question
9 when comparing a US company that uses the last in, first out (LIFO) method of inventory with companies that preparestheir financial statementsunder international financial reporting standards (IFRS), analyst shoulld be aware that according to IFRS, the
LIFO method of inventory: A. Never Acceptable B. is always acceptable C. Is acceptable when applied to finished goods inventory only
10 Analyst is evaluating the balance sheet of US company that uses last in, first out (LIFO) accounting for inventory. The analyst collects the following data
31-Dec-05 31-Dec-06
inventory reporte on balance sheet
$500,000 $600,000
LIFO reserve
$50,000 $70,000
Average tax rate
30% 30%
After adjusting the amount to convert to the first in, first (FIFO) method, inventory at 31 december 2006 would be closest to:
A.$600,000 B. $620,000 C. $670,000
9 when comparing a US company that uses the last in, first out (LIFO) method of inventory with companies that prepares
their financial statementsunder international financial reporting standards (IFRS), analyst shoulld be aware that according to IFRS, the
LIFO method of inventory: A. Never Acceptable B. is always acceptable C. Is acceptable when applied to finished goods inventory only
10 Analyst is evaluating the balance sheet of US company that uses last in, first out (LIFO) accounting for inventory. The analyst collects the following data
31-Dec-05 31-Dec-06
inventory reporte on balance sheet
$500,000 $600,000
LIFO reserve
$50,000 $70,000
Average tax rate
30% 30%
After adjusting the amount to convert to the first in, first (FIFO) method, inventory at 31 december 2006 would be closest to:
A.$600,000 B. $620,000 C. $670,000
Explanation / Answer
9) A. Never Acceptable
10) B. $620,000
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