HH Company Uses LIFO

question 96

Multiple Choice

HH Company uses LIFO. HH disclosed that if FIFO had been used, inventory at the end of 2013 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2012. Assuming HH has a 30% income tax rate:

• A)Its reported cost of goods for 2013 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 2013 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 2013 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 2013 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.

---

Definitions:

Mail-Order Catalog

A printed publication with a list of goods that can be purchased by mail.

Digital Marketing Channel

Platforms or mediums used to reach and engage customers through digital means, including social media, email, websites, and online advertising.

Machinery Manufacturers

Entities involved in the production of machines and industrial equipment.

Virtual Marketing Channel

Digital pathways through which companies promote and sell their products or services online, using platforms such as social media and websites.