A Company Provided the Following Footnote in Its Most Recent

question 100

Short Answer

A company provided the following footnote in its most recent annual report:
During the current and prior year,the company reduced certain inventory quantities that were valued at lower LIFO costs prevailing in prior years.The effect of these physical reductions was to increase after tax earnings this year by $90 million,$.30 per share,and $98 million,or $.327 per share last year.
1.Explain why the reduction in inventory quantity increased after tax earnings for this company.
2.If the company had been using FIFO costing,would the reductions in inventory quantity during the two years have increased after tax earnings? Explain.

---

Definitions:

White And Black Views

Perspectives and opinions that vary between white and black individuals, often in the context of societal, cultural, or political issues.

Race

A social construct used to categorize humans based on physical characteristics, cultural history, and ancestry.

Biologically

Pertaining to biology; relating to the scientific study of life and living organisms and their structure, growth, function, genetics, and evolution.

Black Drug Offenders

Individuals of African descent who are accused or convicted of drug-related crimes, often highlighted in discussions of racial disparities in the justice system.