In a period of rising prices, the inventory reported in Gumby Company's balance sheet is close to

Question:

In a period of rising prices, the inventory reported in Gumby Company's is close to the current cost of the inventory. Pokey Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profit?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...