Black Corporation Uses the FIFO Method for Internal Reporting Purposes

question 94

Multiple Choice

Black Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes.The balance in the LIFO Reserve account at the end of 2010 was $60,000.The balance in the same account at the end of 2011 is $90,000.Black's Cost of Goods Sold account has a balance of $450,000 from sales transactions recorded during the year.What amount should Black report as Cost of Goods Sold in the 2011 income statement?

• A)$420,000.
• B)$450,000.
• C)$480,000.
• D)$540,000.

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Definitions:

Temptation to Cheat

The inclination to engage in dishonest behavior for personal gain, especially when one believes the likelihood of facing consequences is low.

Established Price

A fixed price determined by an agreement or authority, often used in contexts where prices are regulated or negotiated.

Oligopolistic Behavior

Competitive strategies and actions taken by companies in an oligopoly market structure, where a few firms dominate.

Interdependent Nature

The mutual reliance between elements or factors within a system, where the change in one affects the others.