LIFO Inventory Reserve—Used Vehicles – Ford Online Accounting Manual

Assets

LIFO INVENTORY RESERVE—USED VEHICLES	ASSET ACCOUNT
	1480

The difference between the Actual Cost and LIFO method of used vehicle inventory valuation should be recorded in this account.

			Jrnl.	Dr.	Cr.

To set up a reserve to reflect the difference between the FIFO method and the LIFO method of valuing the used vehicle inventories			GJ
	Cost of Sales—Used Vehicles LIFO			6250
		LIFO Inventory Reserve—Used Vehicles			1480

NOTE:	Accounts 1481-1489 are available if additional reserve accounts for used vehicles are required.

Any decision to adopt the LIFO method of inventory valuation and any procedures adopted for accounting and financial reporting under LIFO should be made with the advice of competent tax counsel.

NOTE: For LIFO Dealers, working capital must be calculated as follows:

“Current Assets plus LIFO Reserve minus Current Liabilities“