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In preparing financial statements for year 2018, the financial officer was instructed to use FIFO but failed to do so and instead computed cost of
In preparing financial statements for year 2018, the financial officer was instructed to use FIFO but failed to do so and instead computed cost of goods sold according to LIFO, which led to a $1,400 overstatement in cost of goods sold from using LIFO. Determine the impact on year 2018's income from the error. Also determine the effect of this error on year 2019's income. Assume no income taxes.
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