During 2019 (its first year of operations) and 2020, Fleri Foods used the FIFO Inventory costing method for both financial reporting andtax purposes. At the beginning of 2021, Flerl decided to change to the average method for both financial reporting and tax purposes.Income components before income tax for 2019, 2020, and 2021 were as follows:($ in millions)RevenuesCost of goods sold (FIFO)Cost of goods sold (average)Operating expensesDividends of $27 million were paid each year. Flerl's fiscal year ends December 31.Required:1. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle. (Ignore Income taxes.)2. Prepare the 2021-2020 comparative Income statements.3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO method and determine theadjustment of balance in retained earnings as on January 1, 2020 using average method instead of FIFO method.Req 1Complete this question by entering your answers in the tabs below.View transaction listReq 2 Req 3 and 4Prepare the journal entry at the beginning of 2021 to record the change in accounting principle. (Ignore income taxes.) (If no entry isrequired for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e.,10,000,000 should be entered as 10).)Journal entry worksheet<201920202821$ 470 $ 500(46)(48)(54)(68)(72)(78)(274) (282) (286)1$460Note: Enter debits before credits.Record the change in accounting principle.DateJanuary 01, 2021General JournalDebitCredit

Retained earnings shows the income income of the company which the company has accumulated over a…

During 2019 (its first year of operations) and 2020, Flerl Foods used the FIFO Inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Fierl decided to change to the average method for both financial reporting and tax purposes. Income components before Income tax for 2019, 2020, and 2021 were as follows:

During 2019 (its first year of operations) and 2020, Flerl Foods used the FIFO Inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Fierl decided to change to the average method for both financial reporting and tax purposes. Income components before Income tax for 2019, 2020, and 2021 were as follows:

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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