Part IV: LIFO to FIFO Change

At year$-$end, Utica Corporation announced it would change its inventory valuation method from LIFO to FIFO. Assume that the difference between LIFO and FIFO is $$8\mathrm{.}4$ million and purchase prices had historically been rising.

Required: Describe the financial effects of this policy change on the balance sheet, the income statement and the statement of cash flows. $($Ignore any tax effects$).$Part IV: LIFO to FIFO Change

At year$-$end, Utica Corporation announced it would change its inventory valuation method from LIFO to FIFO. Assume that the difference between LIFO and FIFO is $$8\mathrm{.}4$ million and purchase prices had historically been rising.

Required: Describe the financial effects of this policy change on the balance sheet, the income statement and the statement of cash flows. $($Ignore any tax effects$).$