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HW Question 1

Morris Corporation began operations on 1-1-2017. Morris used the last-in-first-out (LIFO) inventory costing method from 1-1-2017 through 12-31-2019. Presented below are income statement and balance sheet numbers for those 3 years, i.e., based on LIFO. 2017, 2018 and 2019 financial statement numbers based on LIFO Income Statement 2017 2018 2019 CGS - LIFO 11,000 22,000 45,000 Net income 30,000 40,000 75,000 Balance Sheet 2017 2018 2019 12-31 Inventory - LIFO 11,000 12,000 16,000 Retained Earnings on 12-31 30,000 55,000 92,000 CGS = cost of goods sold Morris Corporation changed its inventory costing method to the first-in-first-out method (FIFO) from LIFO as of 1-1-2020. Presented below are the cost of goods sold figures if the FIFO method had been used for 2019 and earlier years. 2017, 2018 and 2019 financial statement numbers based on FIFO Income Statement 2017 2018 2012 CGS - FIFO 9,000 19,000 39,000 CGS = cost of goods sold When Morris issued its 2020 financial statements in April of 2021, it elected to provide comparative statements from 2019 and 2018. The change will be accounted for using the retrospective approach. When Morris issued its 2020 financial statements in April of 2021, what is the Inventory reported on the 12-31-2018 comparative balance sheet ? 8,000 O 7,000 O 15,000 O 9,000 O 13,000 O 16,000 O 11,000 O 17,000 O 12.000

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