Energy, Inc Began Operations in 2018 Using LIFO Inventory Methods

question 68

Multiple Choice

Energy, Inc began operations in 2018 using LIFO inventory methods. In 2019, management decided they should have chosen FIFO. The beginning inventory for 2019 using LIFO was $128,000. Under the FIFO method, the beginning inventory would have been $157,000. The adjustment to inventory for the change in accounting principle for 2019 would be ________.

• A) $0
• B) $29,000 debit
• C) $29,000 credit
• D) $58,000 debit

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Definitions:

Trading Debt Securities

The act of buying and selling debt instruments, such as bonds or debentures, often for short-term profit.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing income and expenses.

Equity Method Investments

Accounting for investments where the investor has significant influence but not full control over the investee, recognizing their share of investee profits.

Cash Dividends

Distributions from a company to its shareholders, representing a share of the firm's profits.