The following is the Balance Sheet and Income Statement for Ella Corp:

LIFO BALANCE SHEET AT 12/31/2024:

Assets		Liabilities & Owners Equity
Cash and Cash Equivalents	$1,000	Accounts Payable	$3,000
Accounts Receivable, Net	$1,000	Notes Payable	$4,000
Inventory	$8,000	Common Stock	$13,000
PPE, Net	$20,000	Retained Earnings	$10,000
TOTAL ASSETS	$30,000	TOTAL LIAB. & OWNERS EQUITY	$30,000

LIFO INCOME STATEMENT FOR THE YEAR ENDING 12/31/2024:

Sales Revenue	$60,000
CGS	($40,000)
Gross Margin	$20,000
Other Gains/(Losses)	($11,000)
Pre-Tax Income	$9,000
Tax Expense (35%)	($3,150)
Net Income	$5,850

From its inception, Ella Corp. used LIFO to value its inventory. The LIFO reserve at 1/1/2024 is $500 and the LIFO reserve at 12/31/2024 is $1,200. You may assume that taxes are always 35% and all taxes are paid in cash.

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If, from its inception, Ella Corp. has used FIFO to value its inventory instead of LIFO, what would Ella Corp. reports as 12/31/2024 Net Income?

Question 38 options:

$5,305

$5,850

$6,850

$6,305

Assume Kelly Co. provides the following information regarding Dollar Value LIFO, which the company began applying in 2025:

December 31	Inventory at End-of-Year Prices	Price Index (percentage)
2025	$700,000	100
2026	$800,000	118
2027	$1,000,000	132

You may round all answers to the nearest dollar.

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What is the dollar-value LIFO balance at 12/31/2026?

Question 39 options:

	$677,966
	$757,576
	$783,051
	$700,000

Question 40 (5 points)

Assume Kelly Co. provides the following information regarding Dollar Value LIFO, which the company began applying in 2025:

December 31	Inventory at End-of-Year Prices	Price Index (percentage)
2025	$700,000	100
2026	$800,000	118
2027	$1,000,000	132

You may round all answers to the nearest dollar.

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What is the dollar-value LIFO balance at 12/31/2027?

Question 40 options:

	$700,000
	$677,966
	$783,051
	$757,576