An analyst is evaluating the balance sheet of a US company that uses last in, fi rst out(LIFO) accounting for inventory. Th e analyst collects the following data:31 Dec 05 31 Dec 06Inventory reported on balance sheet $500,000 $600,000LIFO reserve $ 50,000 $70,000Average tax rate 30% 30%After adjusting the amounts to convert to the fi rst in, fi rst out (FIFO) method, inventory at31 December 2006 would be closest to:A . $600,000.B . $620,000.C . $670,000.

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