Computing and Disclosing a LIFO Liquidation

Southeast Inc. has maintained a periodic inventory system and the LIFO inventory method for over $20$ years. The earliest layers of LIFO inventory of $66,000$ units date back $15$ years. The company had beginning inventory $($January $1)$ made up of the following three layers.

At its December $31$ year$-$end, an involuntary liquidation of beginning inventory occurred. Beginning inventory dropped to $88,000$ units. The current replacement value of inventory is $\backslash (\backslash$$ $50\backslash ).$

a$.$ What is the effect of the LIFO liquidation on after$-$tax profit or loss assuming a $\backslash (25\backslash \%\backslash )$ tax rate? $\backslash (\backslash$$ $\backslash )$

b$.$ What disclosure is required based on the answer to part a$?$

The LIFO liquidation of $\backslash (\backslash$$ $\backslash )$ must be disclosed in the notes to the financial statements.

The effect of the LIFO liquidation is to by $\backslash (\backslash$$ $\backslash )$

which in turn, causes taxes to