Butler Company reported ending inventory at December 31, 2022 of $1,200,000 under LIFO.It also reported a LIFO reserve of $210,000 at January 1, 2022, and $300,000 at December 31, 2022.Cost of goods sold for 2022 was $4,900,000.If Butler Company had used FIFO during 2022, its cost of goods sold for 2022 would have been
A)$5,200,000.
B)$4,990,000.
C)$4,810,000.
D)$4,600,000.

Question

Quizplus · Accepted Answer

The FIFO COGS can be calculated by adjusting the LIFO COGS with the change in the LIFO reserve. The change in the LIFO reserve is $300,000 - $210,000 = $90,000. Since LIFO COGS is higher, subtract the change from LIFO COGS: $4,900,000 - $90,000 = $4,810,000.

Butler Company Reported Ending Inventory at December 31, 2022 of $1,200,000