In 2017 George used the FIFO lower of cost or market inventory method. As of December 31, 2017, the inventory cost was $50,000 and its market price was $40,000. At the time of filing his 2018 income tax return, George changed to the LIFO method. The ending inventory at cost on December 31, 2018, was $75,000 and the market price of the goods totaled $35,000. Which of the following statements is correct?
A)The beginning inventory for 2018 is $50,000, and George must spread a $10,000 adjustment ($50,000 - $40,000) evenly over 2018, 2019, and 2020.
B)The beginning inventory for 2018 is $40,000.
C)The beginning inventory for 2018 is $50,000, and George must spread a $10,000 adjustment over the three previous years.
D)The change is invalid since the taxpayer did not apply for the change by the end of the tax year of change.
E)None of the above.

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The Answer of In 2017 George used the FIFO lower of cost or market inventory method. As of December 31, 2017, the inventory cost was $50,000 and its market price was $40,000. At the time of filing his 2018 income tax return, George changed to the LIFO method. The ending inventory at cost on December 31, 2018, was $75,000 and the market price of the goods totaled $35,000. Which of the following statements is correct?
A)The beginning inventory for 2018 is $50,000, and George must spread a $10,000 adjustment ($50,000 - $40,000) evenly over 2018, 2019, and 2020.
B)The beginning inventory for 2018 is $40,000.
C)The beginning inventory for 2018 is $50,000, and George must spread a $10,000 adjustment over the three previous years.
D)The change is invalid since the taxpayer did not apply for the change by the end of the tax year of change.
E)None of the above.

In 2017 George Used the FIFO Lower of Cost or Market