Answer:
The answer is $40,000
Explanation:
LIFO reserve is the difference between the reported LIFO inventory amount and inventory amount that would have been reported if the FIFO method had been adopted That is:
FIFO inventory - LIFO inventory.
The question states: In 2017, If the company had used FIFO, its inventories would have been higher by $40,000. This is the difference between FIFO inventory and LIFO inventory..
Therefore, the company’s LIFO reserve in 2017 is $40,000
