Question: John Olerud Ltd., a local retailing concern in the Bronx, New York, has decided to change from the conventional retail inventory method to the LIFO

John Olerud Ltd., a local retailing concern in the Bronx, New York, has decided to change from the conventional retail inventory method to the LIFO retail method starting on January 1, 2015. The company recomputed its for 2014 in accordance with the procedures necessary to switch to LIFO retail. The inventory computed was $212,600.

Instructions
Assuming that John Olerud Ltd.’s for 2014 under the conventional retail inventory method was $205,000, prepare the appropriate journal entry on January 1, 2015.

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