Problem 8-7 The management of Sandhill Company has asked its accounting department to describe the effect upon the company's financial position and its income statements of accounting for inventories on the LIFO rather than the FIFO basis during 2017 and 2018. The accounting department is to assume that the change to LIFO would have been effective on January 1, 2017, and that the initial LIFO base would have been the inventory value on December 31, 2016. The following are the company's financial statements and other data for the years 2017 and 2018 when the FIFO method was employed. Level inancial Position as of 12/31/16 12/31/17 12/31/18 91,500 $128,500 155,200 98,100 172,800 172,800 139,400 177,400 157,400 171,000 201,900 $500,700 $537,000 $707,300 $. 39,400 $ 59,600 79,000 73,600 168,800 201,900 201,900 201,900 141,400201,900 257,600 Total liabilities and equity $500,700 $537,000 7,300 79,000 Accounts receivable Inventory Other assets Total assets Accounts payable Other liabilities Common stock Retained earnings 118,000