A Retailing Firm Changed from LIFO to FIFO in 2014

question 5

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,in the comparative 2013 and 2014 income statements,what amounts would be shown for cost of goods sold? 2013 2014

• A) $50,000 $58,000
• B) $51,000 $55,000
• C) $50,000 $55,000
• D) $51,000 $58,000

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Definitions:

Elastic

A description of a good's demand or supply that indicates a high sensitivity to changes in price, where a small change in price leads to a larger change in quantity demanded or supplied.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with elasticity greater or less than one indicating the degree of responsiveness.

Quantity Demanded

The specific amount of a good or service consumers are willing to buy at a given price, holding other factors constant.

Elasticity Coefficient

A measure that quantifies the responsiveness of the quantity demanded or supplied of a good to a change in one of its determinants, such as price.