I know when calculating the net profit for a FIFO comparison we use the change in LIFO reserve * 1-tax rate + LIFO Net profit. However, on the Elan free mock there was a question #58, that was asking us to calculate the change in DTL if we were using FIFO. I thought we used the change in LIFO reserve to make the calculation but the test said the answer was wrong that you should just use Ending LIFO reserve. I looked through my books but did not see an example where both the Beg. & End LIFO reserve was given. What is the rule? Do we calculate the change in LIFO reserve and * by the tax rate or just used Ending LIFO reserve * tax rate?
Edited 1 time(s). Last edit at Thursday, November 25, 2010 at 08:31PM by atomicrooster.
