When a firm faces an inflationary condition, Financial Accounting

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When a firm faces an inflationary condition

Response to the following questions:

1. When a firm faces an inflationary condition and the LIFO inventory method is based on a periodic basis, purchases late in the year can have a substantial influence on profits. Comment.

2. Why could a current asset such as Net Assets of Business Held for Sale distort a firm's liquidity, in terms of working capital or the current ratio?

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Financial Accounting: When a firm faces an inflationary condition

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