Carl Co. began operations in 2021. At the beginning of fiscal year 2023, Carl Co. decided to change its inventory costing method from LIFO to FIFO to improve the balance sheet presentation of inventory. The following information is available for Bob Co.'s inventory: Inventory at the end of 2022 valued under LIFO: $220,000 Inventory at the end of 2022 valued under FIFO: $240,000 To record the change from LIFO to FIFO at the beginning of fiscal year 2023, Bob Co. will make a journal entry that includes Answer a. a debit to Retained Earnings for $20,000. b. a credit to Cost of Goods Sold for $220,000. c. a credit to Inventory for $220,000. d. a debit to Inventory for $20,000.
Carl Co. began operations in 2021. At the beginning of fiscal year 2023, Carl Co. decided to change its inventory costing method from LIFO to FIFO to improve the balance sheet presentation of inventory. The following information is available for Bob Co.'s inventory: Inventory at the end of 2022 valued under LIFO: $220,000 Inventory at the end of 2022 valued under FIFO: $240,000 To record the change from LIFO to FIFO at the beginning of fiscal year 2023, Bob Co. will make a journal entry that includes Answer a. a debit to Retained Earnings for $20,000. b. a credit to Cost of Goods Sold for $220,000. c. a credit to Inventory for $220,000. d. a debit to Inventory for $20,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Carl Co. began operations in 2021. At the beginning of fiscal year 2023, Carl Co. decided to change its inventory costing method from LIFO to FIFO to improve the
- Inventory at the end of 2022 valued under LIFO: $220,000
- Inventory at the end of 2022 valued under FIFO: $240,000
To record the change from LIFO to FIFO at the beginning of fiscal year 2023, Bob Co. will make a
Answer
a.
a debit to Retained Earnings for $20,000.
b.
a credit to Cost of Goods Sold for $220,000.
c.
a credit to Inventory for $220,000.
d.
a debit to Inventory for $20,000.
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