Which of the following steps is required to adjust LIFO to FIFO?
A)Inventory needs to be calculated as reported LIFO inventory plus LIFO reserve.
B)Increase deferred tax payable by LIFO reserve times Tax rate.
C)Retained earnings need to be calculated as reported retained earnings plus LIFO reserve times (1 - Tax rate).
D)All of the above

Question

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All of the above steps are required to adjust LIFO to FIFO. 
- A) Inventory needs to be calculated as reported LIFO inventory plus LIFO reserve. This is because LIFO inventory is reported at the lower of cost or market value, and since it assumes that the last items purchased are sold first, it may not reflect current inventory levels accurately. By adding LIFO reserve (the difference between reported LIFO inventory and what it would be under FIFO) to reported LIFO inventory, we can estimate what inventory levels would be under FIFO.
- B) Increase deferred tax payable by LIFO reserve times Tax rate. This is because LIFO tends to result in lower reported income and therefore lower taxes. As a result, companies are required to adjust their deferred tax liabilities or assets to reflect what they would owe if they were using FIFO. 
- C) Retained earnings need to be calculated as reported retained earnings plus LIFO reserve times (1 - Tax rate). This is because the LIFO reserve represents a reduction in reported income that has accumulated over time. By adding the reserve to reported retained earnings, we can estimate what retained earnings would be if the company had been using FIFO all along. The (1-Tax rate) factor is used because the reserve represents pre-tax income.

Which of the Following Steps Is Required to Adjust LIFO