Spando Apparel uses the LIFO inventory method for external reporting and for income tax purposes but...

 

 

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Spando Apparel uses the LIFO inventory method for external reporting and for income tax purposes but maintains its internal records using FIFO. The following disclosute note was included in a recent annual report Inventories ($ in millions): 2021 2020 Total inventories $ 667 (111) $ 556 $646 (65) $581 LIFO reserve The company's income statement reported cost of goods sold of $3,260 million for the fiscal year ended December 31, 2021. Required: 1. Spando adjusts the UFO reserve at the end of its fiscal year, Prepare the December 31, 2021, adjusting entry to record the cost of goods sold adjustment. 2. If Spando had used FIFO to value its inventories, what would cost of goods sold have been for the 2021 fiscal year? Spando Apparel uses the LIFO inventory method for external reporting and for income tax purposes but maintains its internal records using FIFO. The following disclosute note was included in a recent annual report Inventories ($ in millions): 2021 2020 Total inventories $ 667 (111) $ 556 $646 (65) $581 LIFO reserve The company's income statement reported cost of goods sold of $3,260 million for the fiscal year ended December 31, 2021. Required: 1. Spando adjusts the UFO reserve at the end of its fiscal year, Prepare the December 31, 2021, adjusting entry to record the cost of goods sold adjustment. 2. If Spando had used FIFO to value its inventories, what would cost of goods sold have been for the 2021 fiscal year?