PART II: Caterpillar – uses LIFO to value its ending inventory and cost
of goods sold
The following data was collected from Caterpillar's 10-K filed with the SEC. in the table below
2021
2020
2019
Sales
50,971
41,748
53,800
LIFO cost of goods sold (COGS)
35,513
29,082
36,630
LIFO Net Income
6,493
3,003
6094
LIFO ending inventory - Balance Sheet
14,038
11,402
11,266
LIFO reserve from Note 1
2,599
2,132
2,086
Total assets
82,793
78,324
78,453
Calculations to convert LIFO to FIFO: Please fill in the following amounts:
FIFO Inventory = LIFO inventory + LIFO Reserve
Remember FIFO inventory > LIFO inventory
FIFO Assets = LIFO Assets + LIFO Reserve
Increase in LIFO Reserve during the year
FIFO COGS = LIFO COGS - Increase in LIFO Reserve
Remember FIFO COGS expense < LIFO COGS expense
After-tax effect of LIFO = (1 -21%) × Increase in LIFO Reserve
FIFO Net income = LIFO Net income + After-tax effect of LIFO
Remember FIFO net income > LIFO net income
2021
2020
2019
9,336
8,437
85,392
80,456
80,539
467
46
N/A
35,046
29,036
N/A
369
36
N/A
6,862
3,039
N/A
1) 3y how much would have ending inventory increased in 2021 if the FIFO costing method had
been used instead of LIFO?
