Lantern Company began operations on January 1, 2020, and uses the FIFO method in costing its...
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Lantern Company began operations on January 1, 2020, and uses the FIFO method in costing its raw material inventory. Management is contemplating a change to the LIFO method and is interested in determining what effect such a change will have on net income. Accordingly, the following information has been developed: Final Inventory 2020 2021 FIFO $320,000 $345,000 LIFO 240,000 255,000 Net Income (computed under the FIFO method) 500,000 660,000 Based upon the above information, a change to the LIFO method in 2021 would result in net income for 2021 of Lantern Company began operations on January 1, 2020, and uses the FIFO method in costing its raw material inventory. Management is contemplating a change to the LIFO method and is interested in determining what effect such a change will have on net income. Accordingly, the following information has been developed: Final Inventory 2020 2021 FIFO $320,000 $345,000 LIFO 240,000 255,000 Net Income (computed under the FIFO method) 500,000 660,000 Based upon the above information, a change to the LIFO method in 2021 would result in net income for 2021 of
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