Question: Proponents of the LIFO inventory cost-flow assumption argue that this costing method is superior to the alternatives because it results in better matching of revenue

Proponents of the LIFO inventory cost-flow assumption argue that this costing method is superior to the alternatives because it results in better matching of revenue and expense.

Required:
a. Explain why “better matching” occurs with LIFO.
b. What is the impact on the carrying value of inventory in the when LIFO rather than FIFO is used during periods of inflation?

Step by Step Solution

★★★★★

3.56 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Under LIFO the cost of the most recent purchases are released to cost of g... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

98-B-A-I-A (1885).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

IBT has used the LIFO inventory cost flow assumption for five years. As of December 31, 2010, IBT had 700 items in its inventory, and the $9,000 inventory dollar amount reported on the balance sheet...

IBT has used the LIFO inventory cost flow assumption for five years. As of December 31, 2016, IBT had 700 items in its inventory, and the $9,000 inventory dollar amount reported on the balance sheet...

General Electric uses the LIFO inventory cost flow assumption, reporting inventories on its 2008 balance sheet of $13.7 billion and a LIFO reserve of approximately $706 million. What would be GEs...

Proponents of the LIFO inventory cost flow assumption argue that this costing method is superior to the alternatives because it results in better matching of revenue and expense. Required: a. The...

Backstreets Co. recently acquired all of Jungleland Inc.'s net assets in a business acquisition. The cash purchase price was $7.8 million Jungleland's assets and liabilities had the following...

Proponents of the LIFO inventory cost flow assumption argue that this costing method is superior to the alternatives because it results in better matching of revenue and expense. Required: a. Under...

LIFO versus FIFO-matching and balance sheet impact Proponents of the LIFO inventory cost flow assumption argue that this costing method is superior to the alternatives because it results in better...

Proponents of the LIFO inventory cost flow assumption argue that this costing methods is superior to the alternatives because it results in better matching of revenue and expense. A. explain...

Hi, Please help me with responding to the discussion questions below because I'm having a hard time answering them myself. I have been up all night, and I'm unable to figure them out. I uploaded a...

Each separate response must have approximately 200 words. Assignments vary widely; however, essays should be written in APA style, with in-text citations and a separate reference listing as...

Watcher (Pty) Ltd, a company that sells automobile parts, had the following transactions in relation to its assets: Required: 2.1 On 1 February 2020, the company bought two machines for R70 000 each....

You are the audit senior for a longstanding client, Chattel Ltd. Chattel produces good quality living room and bedroom furniture. The company then sells these in two ways: either to retail outlets...

1 What is physics the scientific study of?

Body fat for men. You are interested in predicting the amount of body fat on a man y using the explanatory variables waist size x1 and height x2. (a) Do you think body fat y and waist size x1 are...

The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $7/unit; direct labor, $10/unit; and manufacturing overhead, $240,000 + $8/unit. Required: If...

Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $26/DLH....

Nautical Accessories, Inc., manufactures women's boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2013, it was estimated that manufacturing overhead would...

For questions 1-6, refer to the following information:Researchers conducted a study to investigate the factors affecting the progression of pneumonia in novel coronavirus disease 2019 (COVID-19)...

Amortization Schedule Set up an amortization schedule for a $50,000 loan to be repaid in equal installments at the end of each of the next 5 years. The interest rate is 6%. Round your answers to the...

The accompanying data are the shoe sizes and heights(in inches) of 14 men. Find the equation of the regression line. Then construct a scatter plot of the data and draw the regression line. Then use...