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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 2018 was $3 million. The balance sheet showed ending inventory of $17 million at the end of 2018. What would the ending inventory have been if CMN had always used FIFO?Multiple Choicea. $20 million.b. $17 million.c. $14 million.d. None of these answer choices are correct.

Respuesta :

Answer:

$20 million

Explanation:

The computation of the ending inventory if FIFO is used

= LIFO reserve + Ending inventory based on LIFO inventory

= $3 million + $17 million

= $20 million

We simply added the LIFO reserve and LIFO ending inventory so that FIFO ending inventory can be computed. Hence, we take all the items for the computation part.

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