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At the beginning of 2016, Air Parts Corp. changed from LIFO to FIFO for inventory costing....

At the beginning of 2016, Air Parts Corp. changed from LIFO to FIFO for inventory costing. Cost of goods sold under LIFO for the last two years was (in millions): 2014: $405 2015: $420 Cost of good sold under FIFO would have been: 2014: $360 2015: $365 Prior to 2014, the cost of goods sold would have been lower by $300 under FIFO. Air Parts pays income taxes at a rate of 40%. Retained earnings on January 1, 2014, was $700 and inventory was $500.

What journal entry should Air Parts make at the beginning of 2016 to record the change in inventory costing methods? *

For 2016, cost of goods sold under LIFO is $430 and under FIFO it is $370. What cost of goods sold amounts should Air Parts report for 2014, 2015 and 2016 on its comparative income statement? *

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