AuthorTopic: An inventory question
@2015-02-07 14:43:10
This question is lifted straight out my ebook

Moore Ltd. uses the LIFO inventory cost flow assumption. Its cost of goods sold in 20X8 was $800. A footnote in its financial statements reads: \"Using FIFO, inventories would have been $70 higher in 20X8 and $80 higher in 20X7.\" Moore’s COGS if FIFO inventory costing were used in 20X8 is closest to:

A) $810.
B) $730.
C) $790.

Your answer: A was incorrect. The correct answer was C) $790.

The ending LIFO reserve is $70 and the beginning LIFO reserve is $80.
FIFO COGS = LIFO COGS − (ending LIFO reserve − beginning LIFO reserve)
$800 − ($70 − $80) = $790 ———> look here.
800- (70-80)=790? Am i looking at this right? 70-80=-10, 800- (-10) is 810. right?

CFA Discussion Topic: An inventory question

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I used your notes and passed ... highly recommended!