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CMN Inc. uses LIFO and has experienced increasing costs since its founding. CMN disclosed that the LIFO reserve (also known as the LIFO allowance) at the end of 2021 was $3 million. The balance sheet showed ending inventory of $17 million at the end of 2021. What would the ending inventory have been if CMN had always used FIFO

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Tundexi

Answer:

$20 million

Explanation:

FIFO inventory = LIFO inventory + LIFO reserve

FIFO inventory = $17 million + $3 million

FIFO inventory = $20 million

If CMN had always used FIFO,  the ending inventory will have been $20 million.

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