Trout Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes. At January 1, 2017, the LIFO reserve has a credit balance of $1,300,000. At December 31, 2017, Trout’s internal reports indicated that the FIFO inventory balance was $2,900,000 and for external reporting purposes the LIFO inventory balance was $1,500,000. What is the amount of the LIFO reserve and the LIFO effect related to 2017? What is the journal entry needed to record the LIFO effect at December 31, 2017?
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Trout Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes.
At January 1, 2017, the LIFO reserve has a credit balance of $1,300,000.
At December 31, 2017, Trout’s internal reports indicated that the FIFO inventory balance was $2,900,000 and for external reporting purposes the LIFO inventory balance was $1,500,000.
What is the amount of the LIFO reserve and the LIFO effect related to 2017? What is the
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