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Exercise 20-7 (Algo) Change In principle; Change In Inventory cost method [LO20-2] Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2024, management decided to change from the average inventory costing method t the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 25%. Income before Income Tax Average Cost $11 million 8 million Difference $7 million Before 2823 2023 2924 FIFO $ 18 million 14 million 13 million 6 million 12 million 1 million Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 2024-2023 comparative income statements. 4. Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends wi $3.50 million each year and that no dividends were paid prior to 2023. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends were $3.5 million each year and that no dividends were paid prior to 2023. Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). MILLINGTON MATERIALS Statement of Shareholders' Equity For the Years Ended December 31, 2024 and 2023 ($ in millions) Common Stock Additional Paid-in Capital Retained Earnings Total Shareholdere Equity Balance at January 1, 2023 $ 0.00 S 0.00 $ 13.50 $ 0.00 Balance at December 31, 2023 S 0.00 $ Balance at December 31, 2024 S 0.00 S 0.00 $ 0.00 21.50 $ 0.00 S 0.00 < Required 2 Required 4 Show less A

Exercise 20-7 (Algo) Change In principle; Change In Inventory cost method [LO20-2] Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2024, management decided to change from the average inventory costing method t the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 25%. Income before Income Tax Average Cost $11 million 8 million Difference $7 million Before 2823 2023 2924 FIFO $ 18 million 14 million 13 million 6 million 12 million 1 million Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 2024-2023 comparative income statements. 4. Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends wi $3.50 million each year and that no dividends were paid prior to 2023. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends were $3.5 million each year and that no dividends were paid prior to 2023. Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). MILLINGTON MATERIALS Statement of Shareholders' Equity For the Years Ended December 31, 2024 and 2023 ($ in millions) Common Stock Additional Paid-in Capital Retained Earnings Total Shareholdere Equity Balance at January 1, 2023 $ 0.00 S 0.00 $ 13.50 $ 0.00 Balance at December 31, 2023 S 0.00 $ Balance at December 31, 2024 S 0.00 S 0.00 $ 0.00 21.50 $ 0.00 S 0.00 < Required 2 Required 4 Show less A

FINANCIAL ACCOUNTING
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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Exercise 20-7 (Algo) Change In principle; Change In Inventory cost method [LO20-2] Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2024, management decided to change from the average inventory costing method t the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 25%. Income before Income Tax Average Cost $11 million 8 million Difference $7 million Before 2823 2023 2924 FIFO $ 18 million 14 million 13 million 6 million 12 million 1 million Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 2024-2023 comparative income statements. 4. Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends wi $3.50 million each year and that no dividends were paid prior to 2023. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends were $3.5 million each year and that no dividends were paid prior to 2023. Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). MILLINGTON MATERIALS Statement of Shareholders' Equity For the Years Ended December 31, 2024 and 2023 ($ in millions) Common Stock Additional Paid-in Capital Retained Earnings Total Shareholdere Equity Balance at January 1, 2023 $ 0.00 S 0.00 $ 13.50 $ 0.00 Balance at December 31, 2023 S 0.00 $ Balance at December 31, 2024 S 0.00 S 0.00 $ 0.00 21.50 $ 0.00 S 0.00 < Required 2 Required 4 Show less A
Transcribed Image Text:Exercise 20-7 (Algo) Change In principle; Change In Inventory cost method [LO20-2] Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2024, management decided to change from the average inventory costing method t the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 25%. Income before Income Tax Average Cost $11 million 8 million Difference $7 million Before 2823 2023 2924 FIFO $ 18 million 14 million 13 million 6 million 12 million 1 million Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 2024-2023 comparative income statements. 4. Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends wi $3.50 million each year and that no dividends were paid prior to 2023. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends were $3.5 million each year and that no dividends were paid prior to 2023. Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). MILLINGTON MATERIALS Statement of Shareholders' Equity For the Years Ended December 31, 2024 and 2023 ($ in millions) Common Stock Additional Paid-in Capital Retained Earnings Total Shareholdere Equity Balance at January 1, 2023 $ 0.00 S 0.00 $ 13.50 $ 0.00 Balance at December 31, 2023 S 0.00 $ Balance at December 31, 2024 S 0.00 S 0.00 $ 0.00 21.50 $ 0.00 S 0.00 < Required 2 Required 4 Show less A
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