Assume prices were stable during the period. The following values were obtained from the inventory records of

Question:

Assume prices were stable during the period. The following values were obtained from the inventory records of Harris Company which has a fiscal year ending on December 31:
Inventory, January 1, 2016, LIFO .... $80,000
Inventory, March 31, 2016, LIFO .... 70,000
Required:
1. Under what conditions is Harris’s inventory not reflected in its first-quarter interim financial statements?
2. Assuming that the is not to be reflected, what adjusting entry would Harris make and how would you determine the amount?
Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....