Question 5 During the course you have discussed four different inventory cost flow assumptions, weighted average, FIFO, and LIFO, as well as specific identification Based on your studies in this course answer the following Can both LIFO and FIFO be used in international financial reporting standards (IFRS) Why or why not Discuss the impact of LIFO and FIFO on the balance sheet and income statement In recent months there has been much discussion in the media and government about the trend of rising inflation Assume that you own a company that uses LIFO as its inventory valuation model If the trend towards high prices continues in the economy, what will be the impact on your firms cost of goods sold, gross profit, and net income What will be the impact on your firms balance sheet, specifically inventory and current ratio

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Question: Question 5 During the course you have discussed four different inventory cost flow assumptions, weighted-average, FIFO, and LIFO, as well as specific identification. Based on

Question 5

During the course you have discussed four different inventory cost flow assumptions, weighted-average, FIFO, and LIFO, as well as specific identification. Based on your studies in this course answer the following:

Can both LIFO and FIFO be used in international financial reporting standards (IFRS)? Why or why not?
Discuss the impact of LIFO and FIFO on the balance sheet and income statement.
In recent months there has been much discussion in the media and government about the trend of rising inflation. Assume that you own a company that uses LIFO as its inventory valuation model. If the trend towards high prices continues in the economy, what will be the impact on your firms cost of goods sold, gross profit, and net income? What will be the impact on your firms balance sheet, specifically inventory and current ratio?

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