Courtney Foster, the inanager of the purchasing department for. The Home Depot, has just returned from astaff meeting The controller, Kelly bramint, ias 3points abed Courtney to purchase a large number of wood boards at year-end as ameans of lowering net income. Courtney's job, as manager of the purchasing depar tment, is to buy wood boards at the best possible price. At the beginning of the year, she was purchasing the boards for $12 per board. The price is currently $20 per board Normally she would wait until next year to see if the price drops, but she is now forced to purchase boards at $20 each to meet the request of the controller. The compary uses the LIFO method of inventory valuation, but she doesn't know what this means. She wonders if it is "right" to use the purchast of an ifventory item to manipulate net income and has asked you for advice, since she knows you are taking an accounting class. Why does this year end inventory purchase of wood boards lower net income? Because the company is spending cash to purchase more inventory. The controller made a midake; the purchase of imventory has no bearing on the amount pf net income. Alower colt of goods sold reduces net income. Since the company is using LIFO, the last items purchased will be included in the cost of good sold. The ending inventory will be stated at a higher amount than if FIFO was used