Question

QV-TV, Inc. provided the following items in its notes to the financial statements for the year-end 2014: Cost of goods sold was $22 billion under FIFO costing and the inventory value under FIFO costing was $2.1 billion. The LIFO Reserve for year-end 2013 was $0.6 billion and at year-end 2014 it had increased to $0.8 billion.
What is the LIFO inventory value at year-end 2014?

a.$1.9 billion.

b.$2.9 billion.

c.$2.3 billion.

d.$1.3 billion.

Answer 1

Answer:

The correct answer is option (d) $1.3 billion.

Explanation:

Given Data:

inventory value under FIFO costing = $2.1 billion

LIFO Reserve for year-end 2013 = $0.6 billion

LIFO Reserve for year-end 2014 = $0.8 billion

LIFO inventory is calculated using the formula;

LIFO inventory value at year-end 2014 = FIFO inventory - LIFO reserve

                                                               =$2.1 billion-$0.8 billion

                                                               = $1.3 billion