LIFO vs. FIFO - JaiminStinglen,5, RoxanneAndujar,...

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Jaimin Stinglen, 5, of Brandon pretends to be a pirate with his mother, Roxanne Andujar, during the Gasparilla Preschooler’s Stroll on Saturday in Tampa. EVE EDELHEIT | TimesThe controller of Sagehen Enterprises believes that the company should switch from the LIFO method to the FIFO method. The controller’s bonus is based on the net income. It is the controller’s belief that the switch in inventory methods would increase the net income of the company. What are the differences between the LIFO and FIFO methods? When a business has to account for the cost of their inventory and the income made from the inventory, they implement an inventory-costing method. The different cost flow assumptions are the LIFO method, the FIFO method, the retail method, and the average cost method. The controller of Sagehen Enterprises used the LIFO method, but they want to switch to the FIFO method to increase the net income of the company. The controller’s bonus is based on the net income of the company. Currently Sagehen Enterprises utilized the LIFO, also know as the “last-in, first-out” method, is assessing the income of assets when products that are received more recently are sold or used first.

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