Green Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2007 was $80,000. The balance in the same account at the end of 2008 is $120,000. Green's Cost of Goods Sold account has a balance of $600,000 from sales transactions recorded during the year. What amount should Green report as Cost of Goods Sold in the 2008 income statement?
A) $560,000
B) $600,000
C) $640,000
D) $720,000

Question

Quizplus · Accepted Answer

$600,000 + ($120,000 - $80,000) = $640,000.

Green Corporation Uses the FIFO Method for Internal Reporting Purposes