* 00edule - 2020FA-A XConnectC Get Homework Help With Chegg Xb Accounting Question | bartleby x +A https://ezto.mheducation.com/ext/map/index.html?_con3Dcon&external_browser%3D0&launchUrl=https%253A%252F%252Fnew... *apter 20 Homework iSavedHelpSave & ExitCheck mExercise 20-2 (Algo) Change in principle; change in inventory methods [LO20-2]2.Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIF0 method at the beginning of2021. The inventory as reported at the end of 2020 using LIFO would have been $55,000 higher using FIFO. Retained earnings at theend of 2020 was reported as $730,000 (reflecting the LIFO method). The tax rate is 40%.IntsSkippedRequired:1. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO hadbeen used in prior years.2. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle.eBookHintPrintComplete this question by entering your answers in the tabs below.ReferencesRequired 1Required 2Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported ifFIFO had been used in prior years.Balance in retained earningsRequired 2 >2 of 4MEISpe here to search同F10PrtSc<>F7+DF5F11F12&%23242.7.4.9.3.5.

Change in Accounting Principle: When an entity decides to change the valuation principle of its…

Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIIFO method at the beginning of 2021. The inventory as reported at the end of 2020 using LIFO would have been $55,000 higher using FIFO. Retained earnings at the end of 2020 was reported as $730,000 (reflecting the LIFO method). The tax rate is 40%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2021 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 2021) as it would have been reported if FIFO had been used in prior years. Balance in retained earnings

Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIIFO method at the beginning of 2021. The inventory as reported at the end of 2020 using LIFO would have been $55,000 higher using FIFO. Retained earnings at the end of 2020 was reported as $730,000 (reflecting the LIFO method). The tax rate is 40%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2021 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 2021) as it would have been reported if FIFO had been used in prior years. Balance in retained earnings

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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Flay Foods has always used the FIFO Inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Flay decided to change to the LIFO method. As a result of the change, net income in 2021 was $78 million. If the company had used LIFO in 2020, Its cost of goods sold would have been higher by $5 million that year. Flay's records of Inventory purchases and sales are not available for 2019 and several previous years. Last year, Flay reported the following net income amounts in its comparative Income statements: ($ in millions) Net income Required: 1. Prepare the Journal entry at the beginning of 2021 to record the change in accounting principle. (Ignore income taxes.) 3. What amounts will Flay report for net Income In Its 2019-2021 comparative Income statements? Complete this question by entering your answers in the tabs below. View transaction list Required 1 Required 3 Prepare the journal entry at the beginning of 2021 to record the change in accounting…
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Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for financial andincome tax reporting on January 1, 2018. Webster continues to use the FIFO method for internal decision-makingpurposes. Webster’s FIFO inventories at December 31, 2018, 2019, and 2020, were $300,000, $412,500, and$585,000, respectively. Internally generated cost indexes are used to convert FIFO inventory amounts to dollar-value LIFO amounts. Webster estimated these indexes as follows:2018 1.002019 1.252020 1.50Required:1. Determine Webster’s dollar-value LIFO inventory at December 31, 2019 and 2020.2. Describe how the change should have been reported in Webster’s 2018 financial statements.
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Toolum Corporation began operations on January 1, 2020, and uses the average-cost method of pricing inventory. Management is contemplating a change ininventory methods for 2023. The following information is available for the years2020–2022 Requirements:(Ignore all tax effects.)a. Prepare the journal entry necessary to record a change from the average-costmethod to the FIFO method in 2023. Show all workings b. Determine net income to be reported for 2020, 2021, and 2022, after givingeffect to the change in accounting policy.
CMN Inc. uses LIFO and has experienced increasing costs since its founding. CMN disclosed that the LIFO reserve (also known as the LIFO allowance) at the end of 2021 was $3 million. The balance sheet showed ending inventory of $17 million at the end of 2021. What would the ending inventory have been if CMN had always used FIFO? Multiple Choice $20 million. S17 milion. $14 milon
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On January 1, 2020, Temple Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $600 million. The 2020 and 2021 ending inventory valued at year-end costs were $702 million and $840 million, respectively. The appropriate cost indexes are 1.08 for 2020 and 1.20 for 2021. Required: Show all calculation for the inventory balance that Temple would report on its year-end balance sheets for 1, 2020 and 2. 2021, using the dollar-value LIFO method. ANSWER: 1. December 31, 2020, DVL inventory $ 2. December 31, 2021, DVL inventory $
Accounting Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The following data were available: Pretax Operating Excess of FIFO Ending Inventory Year Income using over LIFO Ending Inventory LIFO 2020 $40,000 $8,000 2019 20,000 7,000 2018 30,000 4,000 The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception. Required: Answer the following questions relating to the 2019-2020 comparative financial statements. а. What is net income for 2020? b. What is restated net income for 2019? Prepare the 2019 statement of retained earnings as it would appear in the comparative 2019-2020 financial statements. С.
Sampress, Inc., reported inventory in the 2020 year-end balance sheet, using the average cost method, as $342,000. In 2021, the company decided to change its inventory method to FIFO. If the company had used the FIFO method in 2020, ending inventory would have been $367,000. What adjustment would Sampress make for this change in inventory method?
In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020 of $117,000 would have been $130,000 if FIFO had been used. Inventory at the end of 2021 is$142,000 using the new FIFO method but would have been $138,000 if the company had continued to use LIFO.What is the effect of the change on 2021 cost of goods sold?