5. Recording and Reporting a LIFO Reserve

At the end of the annual accounting period, the inventory records of Boton Company show the following. The company uses FIFO for internal purposes and LIFO for income tax and external reporting purposes.

	Prior Year	Current Year
Ending inventory at FIFO	$120,000	$216,000
Ending inventory at LIFO	48,000	84,000

b. Show how inventory should be shown on its comparative balance sheets for the prior and current years.

Balance Sheet, Dec 31	Prior Year	Current Year
Current Assets
Inventory