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Question 11

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Intermediate Accounting (Kieso)
Found in: Page 1306

Short Answer

Discuss how a change to the LIFO method of inventory valuation is handled when it is impracticable to determine previous LIFO inventory amounts.

LIFO is an inventory method and change to the LIFO method then base year inventory values are used

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Step by Step Solution

Definition of LIFO

LIFO is defined as the inventory method in which the inventory that is acquired later is used up or sold first.

Determining LIFO inventory amounts

When the company changes from any inventory method to the LIFO method of inventory, then the base year inventory values for all subsequent LIFO calculations are used.

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