Loire Co. has used the FIFO method since it began operations in Year 3. Loire ch
ID: 2578602 • Letter: L
Question
Loire Co. has used the FIFO method since it began operations in Year 3. Loire changed to the weighted-average method for inventory measurement at the beginning of Year 6. This change was justified. In its Year 6 financial statements, Loire included comparative statements for Year 5 and Year 4. The following shows year-end inventory balances under the FIFO and weighted-average methods:
Year
FIFO
Weighted-Average
3
$ 90,000
$108,000
4
156,000
142,000
5
166,000
150,000
Year
FIFO
Weighted-Average
3
$ 90,000
$108,000
4
156,000
142,000
5
166,000
150,000
Explanation / Answer
Inventory should be reported at $142000or the year ended December 31, Year 4 Option B is correct
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