Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 8, Problem 8.18E
Supplemental LIFO disclosures; LIFO reserve; AEP Industries
• LO8–6
Real World Financials
AEP Industries Inc. is a leading manufacturer of plastic packing films. The company uses the LIFO inventory method for external reporting but maintains its internal records using FIFO. The following disclosure note was included in a recent quarterly report:
4. Inventories (in part)
Inventories are comprised of the following ($ in thousands):
| January 31, 2016 | October 31, 2015 | |
| Raw materials | $ 42,881 | $ 47,593 |
| Finished goods | 71,547 | 66,484 |
| Supplies | 5,240 | 5,280 |
| 119,668 | 119,357 | |
| Less: LIFO reserve | (13,655) | (18,093) |
| Inventories (under LIFO) | $106,013 | $101,264 |
The company’s income statements reported cost of goods sold of $209,826 thousand for the quarter ended January 31, 2016.
Required:
1. Assume that AEP adjusts the LIFO reserve at the end of its quarter. Prepare the January 31, 2016,
2. If AEP had used FIFO to value its inventories, what would cost of goods sold have been for the quarter ended January 31, 2016?
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Chapter 8 Solutions
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