Income Differences—FIFO vs. LIFO
First in, first out has been used for inventory valuation by the Atwood Co. since it was organized in 2005. Using the data that follow, redetermine the net incomes for each year on the assumption of inventory valuation on the last in, first out basis:
|
|
2005 |
2006 |
2007 |
2008 |
|
Reported net income—FIFO basis |
$15,500 |
$ 40,000 |
$ 34,250 |
$ 44,000 |
|
Reported ending inventories—FIFO basis |
61,500 |
102,000 |
126,000 |
120,000 |
|
Ending inventories—LIFO basis |
56,500 |
75,100 |
95,000 |
105,000 |