Hilton Corporation began operations on 1-1-2012. Hilton used thelast-in-first-out (LIFO) inventory costing method from 1-1-2012through 12-31-2014. Presented below are effects of using LIFO for2014 and earlier years.
Year | 2012 | 2013 | 2014 |
| | | |
| | | |
Cost of goods sold (CGS) – LIFO | 900 | 1,000 | 1,100 |
| | | |
Net Income - LIFO | 500 | 650 | 880 |
As of 12-31 | 2012 | 2013 | 2014 |
| | | |
Retained Earnings based on LIFO | 500 | 1,400 | 2,300 |
| | | |
Inventory based on LIFO | 100 | 225 | 500 |
| | | |
Hilton Corporation changed its inventory costing methodfrom LIFO to the first-in-first-out (FIFO) as of 1-1-2015.Presented below are effects of using FIFO for 2014 and earlieryears.
As of 12-31 | 2012 | 2013 | 2014 |
| | | |
Inventory based on FIFO | 120 | 285 | 590 |
When Hilton issued its 2015 financial statements, itelected to provide comparative statements from the three previousyears, i.e., 2012, 2013 and 2014. The change will be accounted forusing the retrospective approach.
Required
When the 2015 financial statements are issued in April of 2016,what will be the comparative retained earnings from the 12-31-2013balance sheet ?
