During 2020, an entity decided to change from FIFO method of inventory valuation to the weighted average method. Inventory balances under each method were: Weighted Average 5,400,000 7,100,000 7,800,000 FIFO December 31, 2017 December 31, 2018 December 31, 2019 4,500,000 7,800,000 8,300,000 The income tax rate is 30%. No other accounting changes was implemented for the year. What amount should be reflected as the effect of change in accounting estimate in the statement of changes in equity for 2020?

During 2020, an entity decided to change from FIFO method of inventory valuation to the weighted average method. Inventory balances under each method were: Weighted Average 5,400,000 7,100,000 7,800,000 FIFO December 31, 2017 December 31, 2018 December 31, 2019 4,500,000 7,800,000 8,300,000 The income tax rate is 30%. No other accounting changes was implemented for the year. What amount should be reflected as the effect of change in accounting estimate in the statement of changes in equity for 2020?

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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Question

During 2020, an entity decided to change from FIFO method of inventory valuation to
the weighted average method. Inventory balances under each method were:
Weighted Average
5,400,000
7,100,000
7,800,000
FIFO
December 31, 2017
December 31, 2018
December 31, 2019
4,500,000
7,800,000
8,300,000
The income tax rate is 30%. No other accounting changes was implemented for the
year.
What amount should be reflected as the effect of change in accounting estimate
in the statement of changes in equity for 2020?

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