Question

Bartal Co. used the LIFO inventory method. At the beginning of 2019, the company decided to change to the FIFO method. For each year reported in the comparability statements, the company makes those statements appear as if FIFO had been applied all along. The following table analyzes the impact of this change on the company’s inventory and income.

	Years ending Dec 31
($ in millions)	2019	2018	2017	Previous years
COGS (LIFO)	$430	$420	$405	$2,000
COGS (FIFO)	370	365	360	1,700
Differences	$  60	$  55	$  50	$   250
Cumulative differences:
COGS	$415	$355	$300	$250
Income taxes (40%)	166	142	120	100
NI and Retained earnings	$249	$213	$180	$150

Bartal Co. will revise 2017 inventory _______________ than it was reported before the change.

Answer 1

Hey ! I think there has been some typing error from your end while putting in the values in the table. But I have tried to rectify the mistakes as much as possible. Please do let me know if there are any doubts. Thank You !