Canyon Ltd uses FIFO stock valuation. Canyon has recently been acquired by a US parent company. The directors in the US wish to know what the profits of the past 5 years would have been if LIFO stock valuation had been applied. Relevant data are provided as follows:

Required:

Calculate the profit that would have been reported for each of years 1 to 4 if LIFO stock valuation had been used throughout the period.

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Year Reported profit 1 2 3 4 50,000 50,000 50,000 50,000 FIFO at 1 Jan 5,000 5,500 6,000 6,800 FIFO at 31 Dec 5,500 6,000 6,800 5,900 LIFO at 1 Jan 3,000 3,000 3,200 3,300 LIFO at 31 Jan 3,000 3,200 3,300 3,300