In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020 of $117,000 would have been $130,000 if FIFO had been used. Inventory at the end of 2021 is$142,000 using the new FIFO method but would have been $138,000 if the company had continued to use LIFO. What is the effect of the change on 2021 cost of goods sold?

In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020 of $117,000 would have been $130,000 if FIFO had been used. Inventory at the end of 2021 is$142,000 using the new FIFO method but would have been $138,000 if the company had continued to use LIFO. What is the effect of the change on 2021 cost of goods sold?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 39BE

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