What would the net income reported on comparative financial

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Reference no: EM132806486

In 2022, Karen Corp. changed method of inventory pricing from LIFO to FIFO. (Ignoring income taxes), the net income computed on a LIFO as compared to a FIFO basis for the four years involved was

             LIFO            FIFO
2019 $78,900    $87,300
2020 $84,500    $88,800
2021    $86,900 $90,300
2022    $92,900    $92,900

The net income showed on comparative financial statement issued 12/31/22 for each year, assuming the company changed to the FIFO method in 2022 was as follows:

2019 $87,300
2020 $88,800
2021 $90,300
2022 $92,900

Assuming the company switched from the average cost method to the FIFO method with net income on an average cost basis for the four years as follows:

2019 - $80,400
2020 - $86,120
2021 - $90,300
2018 - $93,600

The net income on a comparative financial statement issued 12/31/22 for each of the four years under these conditions was as follows:

2019 - $87,300
2020 - $88,800
2021 - $90,300
2022 - $92,900

Problem 1: Assuming the company switched from FIFO to the LIFO method what would the net income reported on comparative financial statements issued at 12/31/22 be for the years 2019, 2020, and 2021?

Reference no: EM132806486

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