The amount of the LIFO reserve on December 31, 2025, is $1,633,700.
The LIFO effect related to 2025 is the difference between the FIFO inventory balance of $2,964,000 and the LIFO inventory balance of $1,633,700, which is $1,330,300. This is the amount by which the LIFO reserve increased during the year.
A LIFO reserve is an amount set aside to account for the difference between the cost of the most recently purchased or produced inventory and the cost of inventory that was purchased or produced earlier. This reserve represents the cost of inventory that was sold first and is used to properly adjust the value of the remaining inventory.
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Kingbird company uses the LIFO periodic method for financial reporting purposes but Lifo for internal reporting purposes. at January 1, 2025 the LIFO reserve has a credit balance of 1232100 at December 31,2025, Kingbird's internal reports indicated that the FIFO inventory balance was $2,964,000 and for external reporting purposes the LIFO inventory balance was $1,633,700. What are the amount of the LIFO reserve and the LIFO effect related to 2025?