The Lawrence Company Began Its Operations on January 1, 2010

question 38

Multiple Choice

The Lawrence Company began its operations on January 1, 2010, and used the LIFO method of accounting for its inventory.On January 1, 2012, Lawrence Company adopted FIFO in accounting for its inventory.The following information is available regarding cost of goods sold for each method: $\begin{array}{rrr}& \text {LIFO Cost of}& \text {FIFO Cost of}\\\text { Year }& \text {Goods Sold}& \text {Goods Sold}\\2010 & \$ 470,000 & \$ 350,000 \\2011 & 690,000 & 450,000 \\2012 & 700,000 & 540,000\end{array}$

Assuming a tax rate of 30% and the same accounting change adopted for tax purposes, how would the effect of the accounting change be reported in opening retained earnings on the 2012 financial statements?

• A)+$360, 000 restatement
• B)+$252, 000 restatement
• C)no restatement
• D)($700, 000)restatement

---

Definitions:

Brain Structures

Brain structures refer to the various parts of the brain, each with specific functions, including regions such as the cerebrum, cerebellum, brainstem, and various nuclei and pathways.

Imprinting

A form of rapid learning occurring at a particular life stage, where an organism forms attachments or establishes a behavioral pattern, typically irreversible.

Neurotrophic Factors

A group of proteins crucial for neuron development, survival, and operation within the nervous system.

Nervous System

The complex network of nerve cells and fibers that transmits nerve impulses between parts of the body.