Free CFA Certification Practice Questions:
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A) $3,000,000
B) $4,000,000
C) $4,500,000
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[Ans: B]
1) Calculate 2009 LIFO COGS as follows:
COGS = (Beginning Inventory + Purchases - Ending Inventory)
=11,000,000 + 7,000,000 - X = 18,000,000 - X , where X = Ending Inventory
2) Solve for ending inventory as follows:
FIFO COGS = (LIFO COGS) - (Ending LIFO Reserve - Beginning LIFO Reserve)
12,500,000 = (18,000,000 - X) - (4,500,000 - 3,000,000)
14,000,000 = 18,000,000 - X
X = 4,000,000
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