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bammbamm538
bammbamm538
29.02.2020 • 
Business

HH Company uses LIFO. HH disclosed that if FIFO had been used, inventory at the end of 2011 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2010. Assuming HH has a 30% income tax rate:

A. Its reported cost of goods sold for 2011 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.
B. Its reported cost of goods for 2011 would have been $14 million less if it had used FIFO rather than LIFO for its financial statements.
C. Its reported cost of goods sold for 2011 would have been $14 million higher if it had used FIFO rather than LIFO for its financial statements.
D. Its reported cost of goods for 2011 would have been $20 million less if it had used FIFO rather than LIFO for its financial statements.
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