2Below is the net income of New Girl Instrument AG, a private company, computed under the two inventory methods using a periodic system.34FIFOAverage Cost5201726,00023,000201830,00025,0007201929,00027,0008202034,00030,000910(Ignore tax considerations.)1112Required13a. Assume that in 2020 New Girl decided to change from the FIFO method to the average-cost method of pricing14inventories. Prepare the journal entry necessary for the change that took place during 2020, and show net income reported15b. Assume that in 2020 New Girl, which had been using the average-cost method since beginning operations in 2017,changed to the FIFO method of pricing inventories. Prepare the journal entry necessary to record the change in 2020, and16show net income reported for 2017, 2018, 2019, and 2020.17

Inventory valuation includes the methods by which the inventory is valued when it is purchased and…

a. Assume that in 2020 New Girl decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2020, and show net income reported b. Assume that in 2020 New Girl, which had been using the average-cost method since beginning operations in 2017, changed to the FIFO method of pricing inventories. Prepare the journal entry necessary to record the change in 2020, and show net income reported for 2017, 2018, 2019, and 2020.

a. Assume that in 2020 New Girl decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2020, and show net income reported b. Assume that in 2020 New Girl, which had been using the average-cost method since beginning operations in 2017, changed to the FIFO method of pricing inventories. Prepare the journal entry necessary to record the change in 2020, and show net income reported for 2017, 2018, 2019, and 2020.

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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