Duffy Company's First Year in Operation Was 2013

question 1

Essay

Duffy Company's first year in operation was 2013. For 2013, its cost of goods sold using FIFO was $60,000, and its ending inventory was $14,600. If Duffy had used the LIFO cost flow method, its ending inventory would have been $14,000.
Required:
a) What would the cost of goods sold have been with LIFO?
b) Based on this information, was 2013 a period of rising prices or falling prices?

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Definitions:

Fair-Value Hedge

A hedge of the exposure to changes in fair value of an asset or liability or an identified portion of such an asset or liability that is attributable to a particular risk.

Exchange Gain

A profit arising from changes in foreign exchange rates that benefit the value of a company's foreign currency denominated assets or liabilities.

April 30 Year-End

A fiscal year or financial reporting period that concludes on April 30th, often used by companies or organizations for tax or reporting purposes.

Cash-Flow Hedge

A financial strategy used to manage risks associated with the fluctuations in cash flows due to changes in exchange rates, interest rates, or commodity prices.