Sheffield Corp. has been using the LIFO method of inventory valuation for 10 years, since it began operations. Its 2020 endinginventory was $62000, but it would have been $84500 if FIFO had been used. Thus, if FIFO had been used, Sheffield's income beforeincome taxes would have beenO $22500 greater in 2020.O $22500 greater over the 10-year period.O $22500 less in 2020.O $22500 less over the 10-year period.

Higher ending inventory implies higher net income. So if FIFO had been used there would be a higher…

Sheffield Corp. has been using the LIFO method of inventory valuation for 10 years, since it began operations. Its 2020 ending inventory was $62000, but it would have been $8450O if FIFO had been used. Thus, if FIFO had been used, Sheffield's income before income taxes would have been O $22500 greater in 2020. O $22500 greater over the 10-year period. O $22500 less in 2020. O $22500 less over the 10-year period.

Sheffield Corp. has been using the LIFO method of inventory valuation for 10 years, since it began operations. Its 2020 ending inventory was $62000, but it would have been $8450O if FIFO had been used. Thus, if FIFO had been used, Sheffield's income before income taxes would have been O $22500 greater in 2020. O $22500 greater over the 10-year period. O $22500 less in 2020. O $22500 less over the 10-year period.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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