As of January 1,2013,Minnesota Inc. decided to change from the Lifo method of inventory valuation to the Fifo method. The change is being made both for tax and financial reporting purposes. Data for the past four years, including 2013, are as follows:
2013 2012 2011 2010
- Sales $2000 $1500 $1200 $1000
- Cost of sales-lifo 1240 900 780 610
- Ending Inventory-Lifo 230 200 120 120
- Cost of sales-Fifo 1170 880 710 590
- Ending inventory-Fifo 300 220 170 170
- The company pays taxes at a rate of 30%
1) Prepare the journal entry needed to record the change from the Sifo valuation method to the Fifo method.
2) On the December 31, 2013 balance sheet, inventory would be recorded as ?
3) For the year ended December 31, 2013, Cost of Sales would be reported as?
4) Prepare the journal entry needed if Minnesota changed from the Fifo valuation method to the Lifo valuatin method instead.