Connors Academy Reported Inventory in the 2017 Year-End Balance Sheet

question 44

Multiple Choice

Connors Academy reported inventory in the 2017 year-end balance sheet, using the FIFO method, as $154,000. In 2018, the company decided to change its inventory method to LIFO. If the company had used the LIFO method in 2017, the company estimates that ending inventory would have been in the range $130,000-$135,000. What adjustment would Connors make for this change in inventory method?

• A) Debit Inventory for $21,500; Credit Cost of goods sold for $21,500.
• B) Debit Retained earnings for $24,000; Credit Inventory for $24,000.
• C) Debit Retained earnings for $19,000; Credit Cost of goods sold for $19,000.
• D) No adjustment is necessary.

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Definitions:

Type A Behaviour

A personality characteristic marked by a constant sense of urgency, competitiveness, and an excessive drive to achieve goals.

Feeling Guilty

describes the emotional state experienced when one believes they have acted against moral, ethical, or personal standards.

Doing Several Things

The ability or action of handling multiple tasks or activities simultaneously.

Alternative Work Schedule

An employment arrangement that differs from the traditional 9-to-5, Monday-to-Friday work week, often including flexible working hours or compressed workweeks.