A Retailing Firm Changed from LIFO to FIFO in 2014

question 44

Multiple Choice

A retailing firm changed from LIFO to FIFO in 2014.Inventory valuations for the two methods appear below:
Purchases in 2013 and 2014 were $60,000 in each year.
-Using the information above,choose the following:

• A) $4,000 RE $55,000
• B) $7,000 RE $58,000
• C) $4,000 Earnings $55,000
• D) $7,000 Earnings $58,000

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Definitions:

Income

The monetary payment received for goods or services, or from other sources, as rents or investments.

Interest Rate

The percentage of a sum of money charged for its use, which reflects the cost of borrowing or the return on savings.

Utility Function

A mathematical representation that ranks an individual's preferences over a set of goods and services, aiming to measure satisfaction or happiness.

Consumption

Households' utilization of goods and services.