(LIFO Effect) The following example was provided to encourage the use of the LIFO method....
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LIFO Effect The following example was provided to encourage the use of the LIFO method. In a nutshell, LIFO subtracts inflation from inventory costs, deduct it from taxable income, and records it in a LIFO reserve account on the books. The LIFO benefit grows as inflation widens the gap between currentyear and pastyear minus inflation inventory costs. The gap is
LIFO Effect The following example was provided to encourage the use of the LIFO method. In a nutshell, LIFO subtracts inflation from inventory costs, deduct it from taxable income, and records it in a LIFO reserve account on the books. The LIFO benefit grows as inflation widens the gap between currentyear and pastyear minus inflation inventory costs. The gap is
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