At the beginning of current year, Black Company changed the inventory cost flow method to FIFO from weighted average method for both financial statement and income tax reporting purposes. The change resulted in a P600,000 increase in the beginning inventory. Ignoring income tax, the accounting change should be reported in the current year: a. Income statement as of P600,000 debit b. Retained earnings statement as a P600,000 debit adjustment to the beginning balance. c. Income statement as a P600,000 credit. d. Retained earnings statement as a P600,000 credit adjustment to the beginning balance.
At the beginning of current year, Black Company changed the inventory cost flow method to FIFO from weighted average method for both financial statement and income tax reporting purposes. The change resulted in a P600,000 increase in the beginning inventory. Ignoring income tax, the accounting change should be reported in the current year: a. Income statement as of P600,000 debit b. Retained earnings statement as a P600,000 debit adjustment to the beginning balance. c. Income statement as a P600,000 credit. d. Retained earnings statement as a P600,000 credit adjustment to the beginning balance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the beginning of current year, Black Company changed the inventory cost flow method to FIFO from weighted average method for both financial statement and income tax reporting purposes. The change resulted in a P600,000 increase in the beginning inventory. Ignoring income tax, the accounting change should be reported in the current year:
a. Income statement as of P600,000 debit
b.
c. Income statement as a P600,000 credit.
d. Retained earnings statement as a P600,000 credit adjustment to the beginning balance.
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