TB MC Qu. 8-98 (Static) A company has the following information... A company has the following information related to its ending inventory: LIFO $300,000 350,000 12/31/2023 12/31/2024 FIFO $ 400,000 480,000 The company makes an adjusting entry with a debit to Cost of Goods Sold and a credit to LIFO Reserve for $130,000 at the end of 2024 ($480,000 - $350,000). Which of the following statements is correct? Multiple Choice The company should instead debit the LIFO Reserve. The adjusting entry should tead be made for $30,000. Cost of goods sold is higher under LIFO than under FIFO by $130,000 in 2024.
TB MC Qu. 8-98 (Static) A company has the following information... A company has the following information related to its ending inventory: LIFO $300,000 350,000 12/31/2023 12/31/2024 FIFO $ 400,000 480,000 The company makes an adjusting entry with a debit to Cost of Goods Sold and a credit to LIFO Reserve for $130,000 at the end of 2024 ($480,000 - $350,000). Which of the following statements is correct? Multiple Choice The company should instead debit the LIFO Reserve. The adjusting entry should tead be made for $30,000. Cost of goods sold is higher under LIFO than under FIFO by $130,000 in 2024.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 15P: (Appendix 8.1) Inventory Write-Down The following are the inventories for the years 2019, 2020, and...
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Transcribed Image Text:TB MC Qu. 8-98 (Static) A company has the following information...
A company has the following information related to its ending inventory:
12/31/2023
12/31/2024
FIFO
LIFO
$ 400,000 $300,000
480,000 350,000
The company makes an adjusting entry with a debit to Cost of Goods Sold and a credit to LIFO Reserve for $130,000 at the end of 2024 ($480,000
- $350,000). Which of the following statements is correct?
Multiple Choice
The company should instead debit the LIFO Reserve.
The adjusting entry should instead be made for $30,000.
Cost of goods sold is higher under LIFO than under FIFO by $130,000 in 2024.
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