Concord Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Concord had used the LIFO method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Concord concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Inventory Determined by Cost of Goods Sold Determined by Date LIFO Method FIFO Method LIFO Method FIFO Method January 1, 2023 $0 $0 $0 $0 December 31, 2023 100 80 850 870 December 31, 2024 210 250 980 920 December 31, 2025 340 390 1,220 1,210 Other information: 1. 2. (a) For each year presented, sales are $2,780 and operating expenses are $970. Concord provides two years of financial statements. Earnings per share information is not required. Prepare income statements under LIFO for 2023, 2024, and 2025.

Concord Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Concord had used the LIFO method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Concord concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Inventory Determined by Cost of Goods Sold Determined by Date LIFO Method FIFO Method LIFO Method FIFO Method January 1, 2023 $0 $0 $0 $0 December 31, 2023 100 80 850 870 December 31, 2024 210 250 980 920 December 31, 2025 340 390 1,220 1,210 Other information: 1. 2. (a) For each year presented, sales are $2,780 and operating expenses are $970. Concord provides two years of financial statements. Earnings per share information is not required. Prepare income statements under LIFO for 2023, 2024, and 2025.

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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