On January 1, 2018, Delta changed its inventory valuation method from LIFO to FIFO for financial...
On January 1, 2018, Delta changed its inventory valuation method from LIFO to FIFO for financial statement purposes. The change will result in an $800,000 increase in inventory at January 1, 2018. The tax rate is 30%. How much should retained earnings be adjusted (indicate direction and dollar amount) so that it is correct (using the new method) as of January 1, 2018
Homework Answers
Retained earning increase by $800, 000.
There will be no effect of taxation because inventory increase is only for the purpose of financial statements.
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On January 1, 2018, Delta changed its inventory valuation method
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