What could have caused the recalculated amounts

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Question - A company hired a new junior accountant to replace an accountant who recently retired. The reported balances for ending inventory and cost of merchandise sold were calculated by the previous accountant before he quit. The previous accountant assumed the FIFO method. Over the past year, the cost per unit of inventory purchased from the company's supplier decreased from $10 per unit to $9.00 per unit.

The new accountant decided to recalculate the balances for ending inventory and cost of merchandise sold.  The new accountant's cost of ending inventory amount was higher and cost of merchandise sold was lower than the previous accountant's reported amounts. The new accountant assumed the LIFO method.

Assuming no calculation errors were made by either individual, what could have caused the recalculated amounts to be different from the original amounts?

How would you explain this to the company's chief accountant?

Reference no: EM132184663

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