Purchase Solution

LIFO or FIFO

Not what you're looking for?

Ask Custom Question

During a period of rising inventory costs and stable output prices, describe how new income and total assets would differ depending upon whether LIFO or FIFO is applied. Explain how your answer would change if the company is experiencing declining inventory costs and stable output prices.

Purchase this Solution

Solution Summary

LIFO and FIFO are examined in the solution. The expert explains how the answer would change if the company is experiencing declining inventory costs and stable output prices.

Solution Preview

In case of inflation i.e., rising of prices of inventory, if the LIFO method is used, the raw material that is purchased last will be issued first and therefore, the cost of goods sold will be higher and the amount of inventory at the end of the financial period will be less, as the goods purchased first will be held as closing inventory. Therefore, the amount of total assets will be less. The amount of net income will be less as the cost of ...

Purchase this Solution


Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Lean your Process

This quiz will help you understand the basic concepts of Lean.