Diaz Company's First Year in Operation Was Year 1

question 24

Essay

Diaz Company's first year in operation was Year 1. For Year 1, its cost of goods sold using FIFO was $240,000, and its ending inventory was $58,400. If Diaz had used the LIFO cost flow method, its ending inventory would have been $56,000.
Required:What would the cost of goods sold have been with LIFO?Based on this information, was Year 1 a period of rising prices or falling prices?

---

Definitions:

Cooling

Cooling refers to the process of losing heat, in the geological context often relating to the solidification of magma into igneous rock.

Partial Melting

The process where only a portion of a solid is melted, which is common in the Earth's mantle and crust.

Felsic Magma

Magma that is rich in silica and lighter elements, leading to lighter-colored rocks such as granite.

Source Region

Areas where air masses originate, having distinct temperature and humidity characteristics based on the underlying surface.