Question

AmerisourceBergen is an American drug wholesale company. The company uses the LIFO inventory method for external reporting but maintains its internal records using FIFO. The following disclosure note was included in a recent quarterly report: 5. Inventories (in part) Inventories are comprised of the following ($ in millions): Inventories (under FIFO) Less: LIFO reserve Inventories (under LIFO) September 30, 2017 $14,628 (1,710) $ 12,918 September 30, 2016 $ 29, 256 (1,918) $ 27,338 The company's income statements reported cost of goods sold of $150,298 million for the quarter ended September 30, 2017. Required: 1. Assume that AmerisourceBergen adjusts the LIFO reserve at the end of its quarter. Prepare the September 30, 2017, adjusting entry to record the cost of goods sold adjustment. 2. If AmerisourceBergen had used FIFO to report its inventories, what would cost of goods sold have been for the quarter ended September 30, 2017? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume that AmerisourceBergen adjusts the LIFO reserve at the end of its quarter. Prepare the September 30, 2017, adjusting entry to record the cost of goods sold adjustment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions.) View transaction list Journal entry worksheet < 1 > Record the cost of goods sold adjustment for the LIFO reserve.

Answer 1

Solution Date Particulars Debit Credit Sep 30, 2017 LIFO Reserve 208 208 To cost of goods sold [ LIFO reserve in 2016 - 1918 1710 2017 208

cost of goods sold under FIFO =[ cost of goods sold reported as por Income Statement t Difference in LIFO researe] [ 150298 -208] 150090 11