Brief Exercise 8-11 Supplemental LIFO disclosures; LIFO Reserve [LO8-6] LIFO Cor

Question

Brief Exercise 8-11 Supplemental LIFO disclosures; LIFO Reserve [LO8-6] LIFO Corporation uses primarily the LIFO inventory method and reported inventories of $2,370 million and $2,542 million in its balance sheets dated December 31, 2018 and Decembber 31, 2017, respectively. Cost of goods sold for the year ended December 31, 2018, is $31,524 million. A disclosure note reports that LIFO reserve is $322 million and $284 million as of December 31, 2018 and December 31, 2017, respectively Calculate the amount of ending inventory and the amount of cost of goods sold for the year ended December 31, 2018, assuming LIFO Corporation uses FIFO instead of LIFO. (Enter your answer in millions.) Ending inventory Cost of goods sold

Explanation / Answer

The answer is as below.

Particulars 31/12/2018 31/12/2017 Lifo Inventory 2370 2542 Add: Lifo reserve 322 284 Closing Inventory under FIFO 2692 2826 COGS Under FIFO CoGS Under LIFO 31524 Less: Ending reserve-opening reserve 38 COGS Under FIFO 31486

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