Question

Assume that, at the end of 1999 (1998), Pfizer reported thatreplacement cost (equivalent to FIFO) for its inventories that arevalued using LIFO accounting were $15 ($8) million greater than theLIFO valuation. Ignoring the impacts of any acquisitions anddivestitures, how much income “from continuing operations beforeprovision for taxes on income and minority interests” would havebeen reported by Pfizer if it had used replacement cost accounting(FIFO) during 1999? Show work and discuss the advantages of FIFOover LIFO and vice versa.