Patch Grove Nursery uses the LIFO inventory accounting method. Maria Huff, president, wants to determine the financial statement impact of changing to the FIFO accounting method. Selected company information follows:
- Year-end inventory: $22,000
- LIFO reserve: $4,000
- Change in LIFO reserve: $1,000
- LIFO cost of goods sold: $18,000
- After-tax income: $2,000
- Tax rate: 40%
Under FIFO, the nursery’s ending inventory and after-tax profit for the year would have been:
|
FIFO ending inventory |
FIFO after-tax profit |
A.
B.
C.
|
