if-a-company-switches-from-fifo-to-lifo-and-the-cumulative-effect-is-a-30000-inc

Question

If a company switches from FIFO to LIFO and the cumulative effect is a $30,000 increase in inventory, what is the impact on retained earnings?

Accepted Answer

Retained earnings increase by $30,000.

Answer

Retained earnings decrease by $30,000.

Answer

Retained earnings remain unchanged.

Answer

Retained earnings increase by $60,000.

If a company switches from FIFO to LIFO and the cumulative effect is a \$30,000 increase in inventory, what is the impact on retained earnings?