LIFO Adjustments—Parts – Ford Online Accounting Manual

Sales and Cost of Sales

LIFO ADJUSTMENTS—PARTS	ASSET ACCOUNT
	6300

The difference between the Actual Cost (FIFO) and LIFO method of parts valuation should be recorded in this account.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers

			Jrnl.	Dr.	Cr.

Reflect the difference between the Actual Cost (FIFO) method and the LIFO method of valuing the parts adjustments			GJ
	LIFO Inventory Reserve—Parts				1490
		Cost of Sales Adjustment—LIFO—Parts		6300

NOTE: Accounts 1491-1499 are available if additional reserve accounts for parts inventories 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“