Shondee Corporation uses the lower of cost or market and FIFO inventory methods. At the end of 2019, the FIFO cost of the ending inventory was $181,000, and the market value of the inventory was $160,000. The corporation switched to LIFO in 2020. As a result, how much must Shondee add to its gross income for each of the years 2020, 2021, and 2022?
Shondee Corporation uses the lower of cost or market and FIFO inventory methods. At the end of 2019, the FIFO cost of the ending inventory was $181,000, and the market value of the inventory was $160,000. The corporation switched to LIFO in 2020. As a result, how much must Shondee add to its gross income for each of the years 2020, 2021, and 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Shondee Corporation uses the lower of cost or market and FIFO inventory methods. At the end of 2019, the FIFO cost of the ending inventory was $181,000, and the market value of the inventory was $160,000. The corporation switched to LIFO in 2020. As a result, how much must Shondee add to its gross income for each of the years 2020, 2021, and 2022?
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Income per year = (Value under FIFO Method - Value Under Cost Method) / No.of year
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