Spando Apparel uses the LIFO inventory method for external reporting and for income tax purposes but maintains its internal records using FIFO. The following disclosure note was included in a recent annual report: Inventories ($ in millions): Total inventories LIFO reserve 2024 $ 679 (119) $ 560 2023 $ 658 (69) $ 589 The company's income statement reported cost of goods sold of $3,300 million for the fiscal year ended December 31, 2024. Required: 1. Spando adjusts the LIFO reserve at the end of its fiscal year. Prepare the December 31, 2024, adjusting entry to record the cost of goods sold adjustment. 2. If Spando had used FIFO to value its inventories, what would cost of goods sold have been for the 2024 fiscal year?
Spando Apparel uses the LIFO inventory method for external reporting and for income tax purposes but maintains its internal records using FIFO. The following disclosure note was included in a recent annual report: Inventories ($ in millions): Total inventories LIFO reserve 2024 $ 679 (119) $ 560 2023 $ 658 (69) $ 589 The company's income statement reported cost of goods sold of $3,300 million for the fiscal year ended December 31, 2024. Required: 1. Spando adjusts the LIFO reserve at the end of its fiscal year. Prepare the December 31, 2024, adjusting entry to record the cost of goods sold adjustment. 2. If Spando had used FIFO to value its inventories, what would cost of goods sold have been for the 2024 fiscal year?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 4P: Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both...
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