What would net income have been in 2004 if Hastings had used LIFO since 1/1/2003?

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Net income in 2004 would have been different if Hastings had used LIFO since 1/1/2003. According to the Generally Accepted Accounting Principles (GAAP), under a LIFO inventory valuation method, inventory cost is assigned to the latest costs incurred by the company and any other prior costs are considered when calculating net income for that period.

In this case, assuming Hastings had used LIFO since 1/1/2003 for its inventory valuation, it would have recognized lower cost of goods sold (COGS) and therefore higher net income. This is because of increased inflation over the years resulting in higher unit prices; carrying out FIFO as opposed to LIFO would result in less COGS being recognized as compared to using LIFO which recognises more current year costs thereby increasing profits.

To calculate what net income would have been during 2004 using LIFO, we can look at how much was spent on purchases during that year and compare it with purchase values from previous years. The difference between these two numbers would be an estimate of how much additional COGS Hastings could have reported under a LIFO approach which in turn will give us an estimated figure of what net income could have potentially been if they had chosen to use the last-in-first-out approach instead.

In addition, companies may favour either FIFO or LIFO depending on their preference and market conditions such as tax rates applicable. Since taxes are typically computed based on differences between gross profit and taxable expenses like wages etc., having larger profits can help reduce taxes payable by companies as well so businesses may choose one over another based on their goals for reducing taxation liabilities each financial year too.