Below is the net income of New Girl Instrument AG, a private company, computed under the two inventory methods using a periodic system. Average Cost P23,000 25,000 27,000 30,000 FIFO P26,000 30,000 29,000 34,000 (Ignore tax considerations.) 2017 2018 2019 2020 Required 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 for 2017, 2018, 2019, and 2020.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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.
Transcribed Image Text: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.
Below is the net income of New Girl Instrument AG, a private company, computed under the two inventory methods using
a periodic system.
FIFO
P26,000
30,000
29,000
34,000
(Ignore tax considerations.)
Average Cost
P23,000
25,000
27,000
30.000
2017
2018
2019
2020
Required
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 for 2017, 2018, 2019, and 2020.
Transcribed Image Text:Below is the net income of New Girl Instrument AG, a private company, computed under the two inventory methods using a periodic system. FIFO P26,000 30,000 29,000 34,000 (Ignore tax considerations.) Average Cost P23,000 25,000 27,000 30.000 2017 2018 2019 2020 Required 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 for 2017, 2018, 2019, and 2020.
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