Question

Shondee Corporation uses the lower of cost or market and FIFO inventory methods. At the end of 2018, the FIFO cost of the ending inventory was $181,000, and the market value of the inventory was $160,000. The corporation switched to LIFO in 2019. If required, round your answer to the nearest dollar. As a result, Shondee Corporation must add: $ ______blank_____

to income for each of the years 2019, 2020, and 2021.

Answer 1

reported as income for all three years is $7,000

Step-by-step explanation:

given data

cost of the ending inventory = $181,000

market value inventory = $160,000

to find out

Shondee Corporation must add income

solution

we get here Income per year that is

Income per year = (Value under FIFO Method - Value Under Cost Method ) ÷ Number of year ..............................1

put here value we get

Income per year =
`(181000 - 160000)/(3)`

Income per year =
`(21000)/(3)`

Income per year = $7000

so reported as income for all three years is $7,000