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In 2017 George Used the FIFO Lower of Cost or Market

question 69

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In 2017 George used the FIFO lower of cost or market inventory method. As of December 31, 2017, the inventory cost was $50,000 and its market price was $40,000. At the time of filing his 2018 income tax return, George changed to the LIFO method. The ending inventory at cost on December 31, 2018, was $75,000 and the market price of the goods totaled $35,000. Which of the following statements is correct?


Definitions:

Problem Solver

An individual or tool that identifies, analyzes, and finds solutions to complex or challenging situations.

Pertinent

Relevant or applicable to a particular matter; aptly or effectively related.

Stroop Effect

A phenomenon demonstrating the interference in reaction time when performing a task, typically illustrated by the difficulty of naming the color of a word when the word itself is a different color.

Automatic Actions

Activities that are performed without conscious thought or attention, typically through learned habits.

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