In preparation for significant expansion of its international operations, Marigold Co. has adopted a plan to gradually shift to the same accounting methods as used by its international competitors. Part of this plan includes a switch from LIFO inventory accounting to FIFO (recall that IFRS does not allow LIFO). Marigold decides to make the switch to FIFO at January 1, 2020. The following data pertains to Marigold's 2020 financial statements (in millions of dollars). Sales Inventory purchases $660 460 12/31/20 inventory (using FIFO) 690 Compensation expense 28 All sales and purchases were with cash. All of 2020's compensation expense was paid with cash. (Ignore taxes.) Marigold's property, plant, and equipment cost $510 million and has an estimated useful life of 10 years with no salvage value. Marigold Co. reported the following for fiscal 2019 (in millions of dollars): MARIGOLD CO. BALANCE SHEET AT DECEMBER 31, 2019 2019 2018 2019 2018 Cash $ 464 $ 310 Common stock $ 610 $ 610 Inventory 610 590 Retained earnings 872 749 Property, plant, and equipment 510 510 Accumulated depreciation (102) (51) Total assets $ 1,482 $ 1,359 Total equity $ 1,482 $ 1,359 MARIGOLD CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019 2019 Sales $ 610 Cost of goods sold (410) Depreciation expense (51) Compensation expense (26) Net income $ 123 Summary of Significant Accounting Policies Inventory: The company accounts for inventory by the LIFO method. The current cost of the company's inventory, which approximates FIFO, was $71 and $61 higher at the end of fiscal 2019 and 2018, respectively, than those reported in the balance sheet. (a) Prepare Marigold's December 31, 2020, balance sheet and an income statement for the year ended December 31, 2020. In columns beside 2020's numbers, include 2019's numbers as they would appear in the 2020 financial statements for comparative purposes. (List Assets in order of liquidity.) Cash Inventory Property, Plant and Equipment MARIGOLD CO. Balance Sheet December 31, 2020 2020 $ 2019 (a) Prepare Marigold's December 31, 2020, balance sheet and an income statement for the year ended December 31, 2020. In columns beside 2020's numbers, include 2019's numbers as they would appear in the 2020 financial statements for comparative purposes. (List Assets in order of liquidity.) Cash Inventory Property, Plant and Equipment Accumulated Depreciation Total Assets Common Stock Retained Earnings Total Equity MARIGOLD CO. Balance Sheet December 31, 2020 $ 2020 2019 MARIGOLD CO. Income Statement For the Year Ended December 31, 2020 $ $ 2020 2019 Total Equity Sales Cost of Goods Sold Depreciation Expense Compensation Expense $ MARIGOLD CO. Income Statement For the Year Ended December 31, 2020 2020 2019 Net Income/(Loss) + $ $ eTextbook and Media eTextbook Assistance Used List of Accounts Save for Later Last saved 18 minutes ago. Attempts: 0 of 3 used Submit