Blossom Corp. began operations on January 1, 2022, and uses FIFO to cost its inventory. Management is contemplating a change to the average cost method and is interested in determining what effect such a change will have on pre-tax income. Accordingly, the following information has been developed: Ending Inventory 2022 2023 FIFO $480000 $539000 Average cost Pre-tax Income (calculated using FIFO) 410000 $985000. $947000. $789000. O $879000. 751000 507000 909000 Based upon the above information, a change to the average cost method in 2023 would result in pre-tax income for 2023 of

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Blossom Corp. began operations on January 1, 2022, and uses FIFO to cost its inventory. Management is contemplating a change to the average cost method and is
interested in determining what effect such a change will have on pre-tax income. Accordingly, the following information has been developed:
Ending Inventory
2022
2023
FIFO
$539000
Average cost
Pre-tax Income (calculated using FIFO)
$480000
$985000.
$947000.
$789000.
$879000.
410000
751000
507000
909000
Based upon the above information, a change to the average cost method in 2023 would result in pre-tax income for 2023 of
Transcribed Image Text:Blossom Corp. began operations on January 1, 2022, and uses FIFO to cost its inventory. Management is contemplating a change to the average cost method and is interested in determining what effect such a change will have on pre-tax income. Accordingly, the following information has been developed: Ending Inventory 2022 2023 FIFO $539000 Average cost Pre-tax Income (calculated using FIFO) $480000 $985000. $947000. $789000. $879000. 410000 751000 507000 909000 Based upon the above information, a change to the average cost method in 2023 would result in pre-tax income for 2023 of
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