A large firm finally realized after many years that LIFO results in the lowest taxes. Therefore, management decided to change from FIFO to LIFO in the current year. Due to the impracticality of determining LIFO layers for many years in the past, the firm began using LIFO in the current year without the usual retrospective procedures. FIFO ending inventory for the previous year (the year before the current year) was $50,000. Ending inventory for the current year for FIFO and LIFO were $80,000 and $65,000 respectively. Purchases for the current year totaled $560,000. Compute CGS for the current year.

a. 525,000

b. 545,000

c. 530,000

d. 560,000

Due to a new accounting principle adopted by the FASB in 20x8, a publicly traded firm changed its method of recognizing revenue on long-term service contracts. The new principle is required to be applied retrospectively. As a result of the change, net revenue for the five years before 20x8 increased $10,000 each year. What amount is reported as cumulative effect of accounting principle change in the retained earnings statement? Ignore income taxes.

	a. 30,000
	b. 40,000
	c. 50,000
	d. 20,000
	e. 10,000
	f. 60,000

e. 555,000