In 2016,Richard's Department Store Changes Its Inventory Method from FIFO

question 109

Multiple Choice

In 2016,Richard's Department Store changes its inventory method from FIFO to LIFO.Richard's uses the simplified LIFO method.Richard's year-end inventory under FIFO is as follows: 2015 - $300,000;2016 - $350,000.The 2015 price index is 110% and the 2016 index is 120%.The 2016 ending inventory after adopting the LIFO method is

• A)$350,000.
• B)$320,833.
• C)$381,818.
• D)$322,727.

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Definitions:

Related Parties

Individuals or entities that have a relationship with the reporting entity that can influence financial transactions or balances due to this relationship.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities that go into their production rather than on a simple allocation basis.

Charging Products

The process of setting a price for a product or service, often seen in context with digital or electrical items but broadly applicable.

Bottleneck

A point of congestion in a production system that occurs when workloads arrive too quickly for the process to handle, significantly slowing down production.