Company21

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The LIFO reserves as of 31 December 2014 and 2015 are $11.7 million and $15.5 million respectively, and The effective income tax rate applicable to the company for 2015 and earlier periods is 20 percent. 1. If company XYZ had used FIFO instead of LIFO, the amount of inventory reported as of 31 December 2015 would have been closet to: A. $46.5 million. B. $65.8 million. C. $77.5 million. 2. If company XYZ had used FIFO instead of LIFO, the amount of cost of goods sold reported by it for the year ended 31 December 2015 would have been closest to: A. $205.6 million. B. $217.3 million.
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