In a period of rising prices, the inventory reported in Knott Companys balance sheet is close to

Question:

In a period of rising prices, the inventory reported in Knott Company’s balance sheet is close to the current cost of the inventory, whereas Quirk Company’s inventory is considerably below its current cost. Identify the inventory cost flow method used by each company. Which company probably has 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...