FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Inventory Valuation
Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…
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a) Compute the approximate income if inventory has been value at approximate current cost.
b) Briefly explain the impact of increase (decrease) inventory reserve to net income.

LIFO reserves: White Rose Company Reported year for analysis, 2013 2013 Net income as reported 2013 Inventory reserve 2012 Inventory reserve 2013 income taxes 2013 Income before income taxes $ 45,200,000 20,000,000 28,000,000 14,000,000 59,200,000
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Transcribed Image Text:LIFO reserves: White Rose Company Reported year for analysis, 2013 2013 Net income as reported 2013 Inventory reserve 2012 Inventory reserve 2013 income taxes 2013 Income before income taxes $ 45,200,000 20,000,000 28,000,000 14,000,000 59,200,000
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