FIN621 GDB Solution, June 2010
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Suppose that you have been using the LIFO (Last in first out) inventory method in your business for the last 15 years. You are much worried because during the current year one of you major supplier is unable to make deliveries that can result in depletion of inventory levels up till the year end.
Explain, what would be the effect on Profits of the business and Income tax in this case.
Your Answer must not be more than two lines.”
Solution:-
In this case the profitability of the business will lower down and and also the income tax too because the income tax lie on the profit of the business.
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