Richardson's Flower Depot uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2015, the following information was obtained from the inventory records:
Required:
1) Prepare the necessary entry to convert to LIFO at the end of 2015.
2) How much would Richardson's cost of goods sold differ in 2015 if it used FIFO for external reporting?

Question

Richardson's Flower Depot uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2015, the following information was obtained from the inventory records: 
 Required:
1) Prepare the necessary entry to convert to LIFO at the end of 2015.
2) How much would Richardson's cost of goods sold differ in 2015 if it used FIFO for external reporting?

Quizplus · Accepted Answer

The Answer of Richardson's Flower Depot uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2015, the following information was obtained from the inventory records: 
 Required:
1) Prepare the necessary entry to convert to LIFO at the end of 2015.
2) How much would Richardson's cost of goods sold differ in 2015 if it used FIFO for external reporting?

Richardson's Flower Depot Uses FIFO for Internal Reporting Purposes and LIFO