HH Company Uses LIFO

question 5

Multiple Choice

HH Company uses LIFO. HH disclosed that if FIFO had been used, inventory at the end of 2009 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2008. Assuming HH has a 30% income tax rate:

• A)Its reported cost of goods for 2009 would have been $14 million less if it had used FIFO rather than LIFO for its financial statements.
• B)Its reported cost of goods for 2009 would have been $20 million less if it had used FIFO rather than LIFO for its financial statements.
• C)Its reported cost of goods sold for 2009 would have been $14 million higher if it had used FIFO rather than LIFO for its financial statements.
• D)Its reported cost of goods sold for 2009 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.

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Definitions:

Technical Standards

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