M. Corp. uses LIFO inventory method. At the end of the 2023 accounting period, the company reported $15,500 of net earnings on the income statement. The inventory balance on the 2023 balance sheet is $9,200. In the footnotes, LIFO reserve at the end of 2023 is $4,200 and LIFO reserve at the end of 2022 is $3,400. N. Corp. uses FIFO and reported $16,100 of net earnings on the 2023 income statement. Which company has higher earnings if both of the companies would use the same inventory method?

M. Corp. uses LIFO inventory method. At the end of the 2023 accounting period, the company reported $15,500 of net earnings on the income statement. The inventory balance on the 2023 balance sheet is $9,200. In the footnotes, LIFO reserve at the end of 2023 is $4,200 and LIFO reserve at the end of 2022 is $3,400. N. Corp. uses FIFO and reported $16,100 of net earnings on the 2023 income statement. Which company has higher earnings if both of the companies would use the same inventory method?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 5E: Fava Company began operations in 2018 and used the LIFO inventory method for both financial...

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