Inventory Adjustments

Use the following information to answer the next two questions. (Hint: Look at section 6.3.)

Here is a set of financial statements prepared using LIFO. The LIFO reserve at beginning of year was $80,000 and at end of year was $106,000. The tax rate is 30%. Assume no sales or purchases of fixed assets or common stock.

	Beginning	Ending			Beginning	Ending
Cash	72,000	25,000		AP	120,000	180,000		Sales	1,600,000
AR	215,000	225,000		Wages	72,000	60,000		COGS	1,300,000
INV	210,000	360,000		NP	52,000	52,000		GP	300,000
CA	497,000	610,000		CL	244,000	292,000		Sals	140,000
NFA	1,050,000	1,000,000		LTD	140,000	125,000		Depn	50,000
				TL	384,000	417,000		Int	12,000
				Equity	1,163,000	1,193,000		EBT	98,000
TA	1,547,000	1,610,000		TL&E	1,547,000	1,610,000		Taxes	29,400
								NI	68,600

14. If the firm had used FIFO instead of LIFO ending inventory would be closest to

	260,000
	360,000

460,000

15. If the firm had used FIFO instead of LIFO COGS would be closest to

	1,274,000
	1,300,000

1,326,000