The Skone Corporation reported at the end of the year a LIFO reserve of $25,000.The beginning LIFO reserve was $20,000.The cost of goods sold was $197,500 under LIFO.The cost of goods sold under FIFO should be

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) under FIFO can be calculated by subtracting the increase in the LIFO reserve from the LIFO COGS. The increase in LIFO reserve is $25,000 (ending) - $20,000 (beginning) = $5,000. Therefore, FIFO COGS = $197,500 (LIFO COGS) - $5,000 (increase in LIFO reserve) = $192,500.

The Skone Corporation Reported at the End of the Year