Comparing inventory methods Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results a In each dropdown that follows, select the correct sign less than ( ) , greater than ( ) , or equal ( ) for each comparison, assuming periods of rising prices FIFO inventory LIFO inventory FIFO cost of goods sold LIFO cost of goods sold FIFO net income LIFO net income FIFO income taxes LIFO income taxes b Why would management prefer to use LIFO over FIFO in periods of rising prices Income shown on the company's tax return would be lower if LIFO rather than FIFO is used Income shown on the company's tax return would be higher if LIFO rather than FIFO is used Cost of goods sold shown on the company's income statement would be lower if LIFO rather than FIFO is used Dividends shown on the company's financial statements would be higher if LIFO rather than FIFO is used

The Answer is in the image, click to view ...

Question: Comparing inventory methods Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. a . In each dropdown that

Comparing inventory methods

Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results.

.

In each dropdown that follows, select the correct sign

[

less than

(),

greater than

(>),

or equal

(=)]

for each comparison, assuming periods of rising prices.

FIFO inventory

LIFO inventory

FIFO cost of goods sold

LIFO cost of goods sold

FIFO net income

LIFO net income

FIFO income taxes

LIFO income taxes

.

Why would management prefer to use LIFO over FIFO in periods of rising prices?

Income shown on the company's tax return would be lower if LIFO rather than FIFO is used.

Income shown on the company's tax return would be higher if LIFO rather than FIFO is used.

Cost of goods sold shown on the company's income statement would be lower if LIFO rather than FIFO is used.

Dividends shown on the company's financial statements would be higher if LIFO rather than FIFO is used.

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock