Question: Mueller Ltd., a local retailing concern in the Bronx, N.Y., has decided to change from the conventional retail inventory method to the LIFO retail method

Mueller Ltd., a local retailing concern in the Bronx, N.Y., has decided to change from the conventional retail inventory method to the LIFO retail method starting on January 1, 2013. The company recomputed its ending inventory for 2012 in accordance with the procedures necessary to switch to LIFO retail. The inventory computed was $210,600.

Instructions
Assuming that Mueller Ltd.’s ending inventory for 2012 under the conventional retail inventory method was $205,000, prepare the appropriate journal entry on January 1, 2013.

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