3 5.Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in2021. Goldmeyer decided to change to the average cost method for determining inventory costs atthe beginning of 2024. The following schedule shows year-end inventory balances under the FIFOand average cost methods:IYear202120222023FIFO$ 46,20081,60087,800Average Cost$ 56,40072,20081,600Required:1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect theaverage cost method.2.How much higher or lower would cost of goods sold be in the 2023 revised incomestatement?

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Description: 3 5.Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in2021. Goldmeyer decided to change to the average cost method for determining inventory costs atthe beginning of 2024. The following schedule shows year-

Inventory includes all the items, merchandise, and raw materials that are used by the business…

Business

Accounting

5. Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in 2021. Goldmexer decided to change to the average cost method for determining inventory costs at the beginning of 2024. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year 2021 2022 2023 FIFO $ 46,200 81,600 87,800 Average Cost $ 56,400 72,200 81,600 Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. How much higher or lower would cost of goods sold be in the 2023 revised income statement?

5. Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in 2021. Goldmexer decided to change to the average cost method for determining inventory costs at the beginning of 2024. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year 2021 2022 2023 FIFO $ 46,200 81,600 87,800 Average Cost $ 56,400 72,200 81,600 Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. How much higher or lower would cost of goods sold be in the 2023 revised income statement?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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