Comparison of LIFO and FIFO

question 18

Essay

Comparison of LIFO and FIFO
Both Company X and Company Y sell the same product.The cost of this product has been rising steadily throughout the year.Both companies reported the same net income for the year,although Company X used the first-in,first-out method of pricing inventory,while Company Y used the last-in,first-out method.
(a)Which company's valuation of ending inventory in the balance sheet is more likely to approximate replacement cost?
Company ________
(b)Which company reports a cost of goods sold figure in the current year income statement that is more likely to reflect the replacement cost of the units sold?
Company ________
(c)Which company is minimizing income taxes it must pay?
Company ________
(d)Which company would have reported the higher net income if both companies had used the same method of pricing inventory?
Company ________

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