Thanks for this video! But around 4:20, when calculating the new reduced COGS under FIFO, should Pre-Tax Income increase by +134, but Net Income increase by 134*(1-Tax Rate)??
I am a bit confused because the tax paid is same on the income statement under both FIOF and LIFO. Assuming constant tax rate, shouldn't the FIFO tax number be higher on the income statement? I think this is preventing me from reconciling the income statement to the retained earnings portion of the balance sheet pls advise! Otherwise, great video, helped tie together the concept very well!
The CFA institute books working for cash balance and retained earnings are different and also produce different answer. If I follow the way this video is showing than do the blue box maths the answers don’t match it’s so confusing.
The adjusted balance sheet wouldn't balance..?
Thanks for this video! But around 4:20, when calculating the new reduced COGS under FIFO, should Pre-Tax Income increase by +134, but Net Income increase by 134*(1-Tax Rate)??
thought of the same - they are ignoring the tax impact in profit and loss side yet adjusting in the balancesheet if you see
I am a bit confused because the tax paid is same on the income statement under both FIOF and LIFO. Assuming constant tax rate, shouldn't the FIFO tax number be higher on the income statement? I think this is preventing me from reconciling the income statement to the retained earnings portion of the balance sheet pls advise! Otherwise, great video, helped tie together the concept very well!
Very good! Thank you very much!
Love these videos! Subbed!
saved me for sure!
Thanks Indeed
The CFA institute books working for cash balance and retained earnings are different and also produce different answer. If I follow the way this video is showing than do the blue box maths the answers don’t match it’s so confusing.
They’re the same. Lol. It’s the tax calculation that you’re getting wrong.
Thank you for this video, but how do I figure out how much the LIFO reserve is?
Fifo minus lifo is the reserve
Companies disclose the difference in notes.
don't bother yourself, that's why accountants exist. focus on the analysis.
I assume companies ask software engineers to simulate that in ERP or some ERP has this options. It is just recalculation.
@masensen858 Actually, I am an accountant now thanks.
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