Ace Company began the current accounting period with 9,000 units of inventory purchased for $100 per unit. Ace sells its units at $300 per unit. Ace would experience a LIFO liquidation if:

Question

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A LIFO liquidation occurs when the number of units sold exceeds the number of units purchased during the period, causing the company to dip into older inventory layers. This would happen if the ending inventory falls below the beginning inventory level of 9,000 units.

Ace Company Began the Current Accounting Period with 9,000 Units