Tyler Company Uses the Periodic Inventory System and Reported the Following

Essay

Tyler Company uses the periodic inventory system and reported the following summarized annual data at the end of 2022: $\begin{array}{lr}\text { Sales revenue } & \$ 1,000,000 \\\text { Cost of goods sold* } & 600,000 \\\text { Gross profit } & \$ 400,000 \\\end{array}$ *Based on an ending FIFO inventory of $240,000.
The controller of the company is considering a switch from FIFO to LIFO. He has determined that on a LIFO basis, the ending inventory would have been $150,000.
Instructions
(a) Restate the summary information on a LIFO basis.
(b) What effect, if any, would the proposed change have on Tyler's sales revenue and gross profit?
(c) If you were an owner of this business, what would your reaction be to this proposed change?