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Write your response and explain your reasoning.
Northstar begins with 60 units at $9. It buys 40 at $11, sells 70, buys 30 at $14, and sells 25. Compute periodic and perpetual LIFO schedules and reconcile units and cost. For a matched periodic FIFO comparison, use the calculator's ending amount and a supplied zero opening reserve to bridge inventory and cost of goods sold.
In a separate pool, Northstar releases 15 units from an older $8 layer when the supported current unit cost is $14. Compute the bounded cost and pretax-income effect. Write a review note that separates cost assignment, reserve scope, liquidation evidence, operating interpretation, tax, SEC-registrant disclosure, and the IFRS boundary.
Use ASC 330-10-30-9, ASC 330-10-50-1, and the SEC-scoped ASC 330-10-S99-3.
Compare your reasoning with the worked answer
Northstar has 130 units and $1,400 available; 95 units sell and 35 remain. Periodic LIFO assigns 30 units at $14, 40 at $11, and 25 at $9 to expense. Cost of goods sold is $1,085, and ending inventory is $315. Perpetual LIFO assigns $710 to the first sale and $350 to the second. Cost of goods sold is $1,060, and ending inventory is $340. The later $14 purchase cannot enter the first perpetual sale.
Matched periodic FIFO ending inventory is $475. The ending LIFO reserve is $160. The supplied opening reserve is zero, so the reserve change is $160 and FIFO comparison cost of goods sold is $925. With a nonzero opening reserve, use the change rather than the ending amount.
In the separate liquidation pool, 15 units at an older $8 cost replace a stipulated $14 current cost. Cost of goods sold is $90 lower and pretax income is $90 higher before tax. This does not prove better operations, cash, or the disclosure conclusion. Confirm SEC-registrant status and materiality before applying the SEC staff disclosure paragraph. IAS 2 does not include LIFO.