Unformatted text preview: progresses. This leaves the inventory with no reflection to the current replacement cost. This make the cost of goods sold higher, which leaves to lower profits. Depending on what I would be showing, would be my decision on the choosing from the two. I would go with the FIFO method because it shows a higher profit. Using LIFO would make the profits less and using FIFO would show investors a greater profit. So, at this point I would think showing higher profits would make investors see what they would be working with. Reference: Spiceland, J. D., Sepe, J. F., & Nelson, M. W. (2011). Intermediate Accounting, Sixth Edition. New York, N.Y.: McGraw-Hill Irwin....
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- Fall '10
- FIFO and LIFO accounting, Sepe, higher priced goods, higher profits