Taveras Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation. Taveras had used the LIFO method for financial reporting since its inception on January 1, 2018, and had maintained records adequate to apply the FIFO method retrospectively. Taveras concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Income taxes are ignored.

		Inventory Determined by				Cost of Goods Sold Determined by
Date		LIFO Method		FIFO Method		LIFO Method		FIFO Method
January 1, 2018		$ 0		$ 0		$ 0		$ 0
December 31, 2018		100		80		800		820
December 31, 2019		200		240		1,000		940
December 31, 2020		320		390		1,130		1,100

Retained earnings reported under LIFO are as follows.

		Retained Earnings Balance
December 31, 2018		$1,200
December 31, 2019		2,200
December 31, 2020		3,070

Other information:

1.		For each year presented, sales are $3,000 and operating expenses are $1,000.
2.		Taveras provides two years of financial statements. Earnings per share information is not required.

(a)

Prepare income statements under LIFO for 2018, 2019, and 2020.

TAVERAS CO. Income Statement For the Year Ended December 31
LIFO
		2018		2019		2020
select an income statement item SalesCost of Goods SoldOperating ExpensesNet Income / (Loss)		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an income statement item SalesCost of Goods SoldOperating ExpensesNet Income / (Loss)		enter a dollar amount		enter a dollar amount		enter a dollar amount
select an income statement item SalesCost of Goods SoldOperating ExpensesNet Income / (Loss)		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name for this statement SalesCost of Goods SoldOperating ExpensesNet Income / (Loss)		$enter a total net income or loss amount		$enter a total net income or loss amount		$enter a total net income or loss amount

Prepare income statements under FIFO for 2018, 2019, 2020

Saved work will be auto-submitted on the due date. Auto-submission can take up to 10 minutes.

Attempts: 0 of 3 used

Submit Answer

(b)