The following values were obtained from the inventory records of the Harris Company, which has a fiscal

Question:

The following values were obtained from the inventory records of the Harris Company, which has a fiscal year ending on December 31:
Inventory, January 1, 2007, LIFO ..... $80,000
Inventory, March 31, 2007, LIFO ..... 70,000

Required
1. Under what conditions is the company’s inventory not reflected in its first-quarter interim financial statements?
2. Assuming that the is not to be reflected, what adjusting worksheet entry would the company 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....