9 when comparing a US company that uses the last in, first out (LIFO) method of

Question

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





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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