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Niles Co.has the following data related to an item of inventory:
-Emley Company has been using the average cost method of inventory valuation for 10 years, since it began operations.Its 2010 ending inventory was $40,000, but it would have been $60,000 if FIFO had been used.Thus, if FIFO had been used, Emley's income before income taxes would have been

Question

Use the following information for questions.
Niles Co.has the following data related to an item of inventory: 
-Emley Company has been using the average cost method of inventory valuation for 10 years, since it began operations.Its 2010 ending inventory was $40,000, but it would have been $60,000 if FIFO had been used.Thus, if FIFO had been used, Emley's income before income taxes would have been

Quizplus · Accepted Answer

FIFO would have resulted in a higher ending inventory and a lower cost of goods sold in each of the 10 years. This would have resulted in a higher income before income taxes in each year, for a total of $20,000 over the 10-year period.

Use the Following Information for Questions