In 2024, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2023 of $102,000 would have been $120,000 if FIFO had been used. Inventory at the end of 2024 is $133,000 using the new FIFO method but would have been $123,000 if the company had continued to use LIFO. What is the effect of the change on 2024 cost of goods sold? 2024 cost of goods sold is higher

In 2024, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2023 of $102,000 would have been $120,000 if FIFO had been used. Inventory at the end of 2024 is $133,000 using the new FIFO method but would have been $123,000 if the company had continued to use LIFO. What is the effect of the change on 2024 cost of goods sold? 2024 cost of goods sold is higher

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 1CP: Bhushan Company has been using LIFO for inventory purposes because it would prefer to keep gross...

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Moore Company uses the LIFO cost flow assumption and carries Product A in inventory on December 31, 2019, at its unit cost of 9.50. Because of a sharp decline in demand for the product, the selling price was reduced to 10.00 per unit. Moores normal profit margin on Product A is 2.00, disposal costs are 1.00 per unit, and the replacement cost is 6.50. Under the lower of cost or market rule, Moores December 31, 2019, inventory of Product A should be valued at a unit cost of: a. 6.50 b. 9.00 c. 7.00 d. 9.50
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