Question - Phillip Company reported the following information for 2014 and 2015:
|
2014
|
2015
|
|
Raw material
|
$126,176
|
$124,814
|
|
Work-in-process
|
$40,210
|
$46,415
|
|
Finished goods
|
$121,270
|
$113,050
|
|
$289,658
|
$286,282
|
Inventory is valued, at the lower of cost or market, on the LIFO basis. At December 31, 2014 and 2015, the inventory amounts are $32,100 and $33,500 below current replacement cost (FIFO).
Define what is meant by the "Lifo Reserve," and give the dollar amount for 2015.
What were the cumulative tax savings, including 2015 (tax rate is 30%), because the LIFO method is used.