INVENTORY Flashcards
1
Q
Assuming Constant inventory quantities, which inventory cost method will produce a lower ITO Ratio during inflation.
A
FIFO
2
Q
Stitch adopted Dollar value of LIFO.
Original price of inventory in adoption date - 50000, During the year inventory increased 30,000 using base year prices and prices increased 10 percent. The designated MV Of the the inventory increased exceeded its cost at year end. What amount of inventory should stitch report in its year end BS
A
Lifo always in layers.
Original 50k in first layer
Then inventory increase by 30k so 50+30 = 80000. Again price rise by 10% so 30000x110%= 33000 plus 50000 = 83,000.
