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37. Sea Gull, Inc. uses FIFO for internal purposes and LIFO for income tax and external reporting purposes. At the end of the year, the
37. Sea Gull, Inc. uses FIFO for internal purposes and LIFO for income tax and external reporting purposes. At the end of the year, the inventory records of Sea Gull, Inc, include the following items. The entry to adjust the inventory allowance to reduce FIFO inventory to LIFO inventory at the end of 2021 would include what amount? A) A debit to cost of goods sold for $60,000. B) A credit to cost of goods sold for $60,000. C) A debit to cost of goods sold for $15,000. D) A credit to cost of goods sold for $15,000 38. Waltham Distribution Company has measured its December 31,2020 , inventory on a FIFO basis at $200,000. Information pertaining to that inventory follows. At December 31,2020 , what is the loss that Waltham should recognize? Assume no previously recorded inventory losses. A) \$8,000 B) $10,000 C) $2,000 D) S-0- Use the following information to complete Questions 39 and 40 . nformation pertaining to the inventory of Paddington Company follows. 39. What is the lower-of-cost-or-net realizable value of Paddington's December 31,2020 , inventory applying the rule to each individual item? A) $91,000 B) $92,500 C) $94,000 D) $96,300 E) $93,300 40. What is the loss (if any) that Paddington would record on December 31, 2020, applying the lower-ofcost-or net realizable value rule to (a) each inventory category and (b) to total inventory
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