Question: BigBook.Com uses LIFO inventory accounting. Notes to BigBook.Coms Year 9 financial statements disclose the following (it has a marginal tax rate of 35%): Required: a.

BigBook.Com uses LIFO inventory accounting. Notes to BigBook.Com€™s Year 9 financial statements disclose the following (it has a marginal tax rate of 35%):

Required:
a. Determine the amount by which Year 9 retained earnings of BigBook.Com changes if FIFO is used.
b. Determine the amount by which Year 9 net income of BigBook.Com changes if FIFO is used for both Years 8 and9.
c. Discuss the usefulness of LIFO to FIFO restatements in an analysis of BigBook.Com.
(AICPAAdapted)

Year 9 Raw material$392,675 $369,725 Finished products 401342 377,104 794,017 746,829 Less LIFO reserve46,000 (50,000) $748,017 $696,829 Inventories Year 8

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