Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2024. The inventory as reported at the end of 2023 using LIFO would have been $67,000 higher using FIFO. Retained earnings at the end of 2023 was reported as $850,000 (reflecting the LIFO method). The tax rate is 34%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2024 to record the change in accounting principle. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if FIFO had been used in prior years. Balance in retained earnings < Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry at the beginning of 2024 to record the change in accounting principle. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the change in accounting principle. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal
Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2024. The inventory as reported at the end of 2023 using LIFO would have been $67,000 higher using FIFO. Retained earnings at the end of 2023 was reported as $850,000 (reflecting the LIFO method). The tax rate is 34%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2024 to record the change in accounting principle. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if FIFO had been used in prior years. Balance in retained earnings < Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry at the beginning of 2024 to record the change in accounting principle. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the change in accounting principle. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2024. The inventory as reported at the end of 2023 using LIFO would have been $67,000 higher using FIFO.
Required:
- Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if FIFO had been used in prior years.
- Prepare the
journal entry at the beginning of 2024 to record the change in accounting principle.
Transcribed Image Text:Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of
2024. The inventory as reported at the end of 2023 using LIFO would have been $67,000 higher using FIFO. Retained earnings at the
end of 2023 was reported as $850,000 (reflecting the LIFO method). The tax rate is 34%.
Required:
1. Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if FIFO had
been used in prior years.
2. Prepare the journal entry at the beginning of 2024 to record the change in accounting principle.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if
FIFO had been used in prior years.
Balance in retained earnings
< Required 1
Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare the journal entry at the beginning of 2024 to record the change in accounting principle.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
1
Record the change in accounting principle.
Note: Enter debits before credits.
Date
January 01, 2024
General Journal
Debit
Credit
Record entry
Clear entry
View general journal
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