The following data was collected from the accounting records of Ambrose, Inc., for the month of June. 200 units were sold during the month. Ambrose currently uses the FIFO method of valuing inventory. What would have been the difference in Ambrose's ending inventory under the LIFO costing method?

Question

The following data was collected from the accounting records of Ambrose, Inc., for the month of June. 200 units were sold during the month. Ambrose currently uses the FIFO method of valuing inventory.  What would have been the difference in Ambrose's ending inventory under the LIFO costing method?

Quizplus · Accepted Answer

Since prices are rising, LIFO (Last In First Out) method would result in valuing the ending inventory at higher prices. This would decrease the ending inventory value compared to the FIFO method. Thus, the ending inventory would be $120 lower under LIFO.

The Following Data Was Collected from the Accounting Records of Ambrose