
First In First Out (FIFO): First in first out (FIFO) is the method of
Last In First Out (LIFO) Last in first out (LIFO) is the method of inventory valuation meaning the goods which are purchased last will be sold first.
(a)
To prepare: To prepare the income statements for the years 2015, 2016, and 2017 under FIFO and LIFO method.
Given information:
|
Inventory determined by |
Cost of goods sold determined by |
||
Date |
LIFO |
FIFO |
LIFO |
FIFO |
January 1, |
0 |
0 |
0 |
0 |
December 31, |
100 |
80 |
800 |
820 |
December 31, |
200 |
240 |
1,000 |
940 |
December 31, |
320 |
390 |
1,130 |
1,100 |
(b)
(b)
To prepare: To prepare the income statements for the year 2016 and 2017 after the changes in the accounting of methods from LIFO to FIFO.
(c)
(c)
To prepare: To prepare the note to the financial statements describing the change in method of inventory valuation.
(d)
(d)
To prepare: To prepare statement of comparative
Given information:
Dates |
Retained earnings balance |
December 31, 2015 |
1,200 |
December 31, 2016 |
2,200 |
December 31, 2017 |
3,070 |

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Chapter 22 Solutions
Intermediate Accounting
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