AEP Industries Inc. is a leading manufacturer of plastic packing films. 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: 4. Inventories (in part) Inventories are comprised of the following ($ in thousands): January 31, 2016 October 31, 2015

The companys income statements reported cost of goods sold of $249,826 thousand for the quarter ended January 31, 2016. Required: 1. Assume that AEP adjusts the LIFO reserve at the end of its quarter. Prepare the January 31, 2016, adjusting entry to record the cost of goods sold adjustment. 2. If AEP had used FIFO to value its inventories, what would cost of goods sold have been for the quarter ended January 31, 2016?

Raw materials Finished goods Supplies January 31, 2016 $ 57,883 109,483 7,465 174,831 (19,950) $154,881 October 31, 2015 $ 56,467 99,363 7,922 163,752 (24,823) $ 138,929 Less: LIFO reserve Inventories (under LIFO)