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tiffancy & co uses LIFO for its inventory valuation. tiffancy reports 100,000 of lifo reserve for...

tiffancy & co uses LIFO for its inventory valuation. tiffancy reports 100,000 of lifo reserve for beginning inventory, and 150,000 of lifo reserve for ending inventory. if it used fifo method , its net income would have been:

A) 50,000 higher

B) 50,000 lower

C) 35,000 higher

D) 35,000 lower

Business   Accounting   
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Answer #1
For calculating the Cost of Goods Sold for any product if the company have more opening inventory than
there is Loss of that amount and if the company have the more closing inventory than there is more profit
So for the opening reserve profit will be go down by = -$1,00,000.00
And for the closing reserve the profit will increase by = $1,50,000.00
Net effect is increase in the overall gain = $50,000.00
Answer = Option A = 50,000 Higher
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