Ask Question
BusinessBusiness
4 April, 20:17

A company decided to change its inventory valuation method from FIFO to LIFO in a period of rising prices. What was the result of the change on ending inventory and net income in the year of the change?

+1
Answers (1)
  1. 4 April, 23:55
    0
    Ending Inventory = Decrease

    Net Income = Decrease

    Explanation:

    If the company chooses to go to LIFO inventory systems, the ending inventory will decrease. It is because of the selling the latest purchased items earlier. It will decrease the ending inventory assuming that the latest items are costly.

    Again, as the ending inventory decreases, the cost of goods sold becomes higher. As the cost of goods sold tends to be higher, the net income will become decrease automatically.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A company decided to change its inventory valuation method from FIFO to LIFO in a period of rising prices. What was the result of the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
In 2 or 3 sentences, explain why the following scenario is an example of price discrimination: The airline charges Justin $200 for a ticket. The airline charges Nathan $300 for a ticket on the same flight.
Answers (1)
You are interested in buying a share of stock in LMU Company. You expect a dividend payment of $10 next year and that the dividend will grow by 6% per year thereafter. You desire a 8% return on your purchase.
Answers (1)
The financial statements of Clearwater Furniture Company include the following items: 20172016 Cash$63,500$51,000 Short-term Investments28,00017,000 Net Accounts Receivable 94,000106,000 Merchandise Inventory157,000143,000 Total Assets531,000544,000
Answers (1)
In partnerships, when should partners determine how profits will be divided?
Answers (1)
What must audit firms do to perform financial statement audits for public companies? a. Register with the Public Company Accounting Oversight Board. b. Register with the Institute of Internal Auditors c.
Answers (1)
New Questions in Business
Kara wants to build a business. She has plenty of capital and potential investors and partners. She wants to avoid the burden of sole liability for her business and wants to be able to close the business when she is no longer interested in it.
Answers (1)
Jeff was recently hired as a flight attendant. He is expected to use both mind and body to becheerful on the job. Jeff's flight attendant job requires. emotional labor
Answers (1)
Given the following information, the total contribution margin is: Sales Revenue $5,000 Variable cost of goods sold 2,700 Full cost of goods sold 2,900 Fixed selling and admin. expenses 1,100 Variable selling and admin. expenses 800 a. $1,500 b.
Answers (1)
Which of the following is true of a corporation? A. A corporation has a limited life. B. The stockholders of a corporation have unlimited liability for the corporation's debt. C. A corporation cannot be privately held. D.
Answers (1)
Cypress Corporation, a calendar year end corporation, has an AMT credit carryforward from 2018 (the credit arose in 2017) in the amount of $43,000. In 2019, Cypress has $170,000 of taxable income.
Answers (1)
Home » Business » A company decided to change its inventory valuation method from FIFO to LIFO in a period of rising prices. What was the result of the change on ending inventory and net income in the year of the change?
Sign Up Forgot Password?