S6-6. (Learning Objective 3: Computing income and income tax effects of LIFO)

Macrodata.com uses the LIFO method to account for inventory. Macrodata is having an unusually good year, with net income well above expectations. The company’s inventory costs are rising rapidly. What can Macrodata do immediately before the end of the year to decrease net income? Explain how this action decreases reported income, and also why Macrodata might want to decrease its net income.