Victor Manufacturing Co. switched from FIFO to LIFO on January 1, 2004 for exter
ID: 2533855 • Letter: V
Question
Victor Manufacturing Co. switched from FIFO to LIFO on January 1, 2004 for external reporting and income tax purposes, while retaining FIFO for internal reports. On that date the FIFO inventory equaled $360,000. The ensuing three-year period resulted in the following:
Date
Inventory
Year-End Costs
Cost
Index
December 31, 2004
$438,000
1.05
December 31, 2005
460,000
1.25
December 31, 2006
520,000
1.35
The ending inventory at December 31, 2005, using the Dollar-value LIFO method would be
a.
$370,000
b.
$402,000
c.
$368,400
d.
$368,000
Date
Inventory
Year-End Costs
Cost
Index
December 31, 2004
$438,000
1.05
December 31, 2005
460,000
1.25
December 31, 2006
520,000
1.35
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