On January 1, 2023, Cullumber Ltd. changed its inventory valuation method from weighted-average cost to FIFO forfinancial statement and income tax purposes, to make its reporting as reliable and more relevant. The change resultedin a $914000 increase in the beginning inventory at January 1, 2023. Assume a 25% income tax rate. The cumulativeeffect of this accounting change reported for the year ended December 31, 2023 isⒸ $228500.Ⓒ$914000.$0.$685500.

Inventory, based on its intended use and where it is in the manufacturing or distribution process.…

financial statement and income tax purposes, to make its reporting as reliable and more relevant. in a $914000 increase in the beginning inventory at January 1, 2023. Assume a 25% income tax ra effect of this accounting change reported for the year ended December 31, 2023 is

financial statement and income tax purposes, to make its reporting as reliable and more relevant. in a $914000 increase in the beginning inventory at January 1, 2023. Assume a 25% income tax ra effect of this accounting change reported for the year ended December 31, 2023 is

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

On January 1, 2023, Cullumber Ltd. changed its inventory valuation method from weighted-average cost to FIFO for
financial statement and income tax purposes, to make its reporting as reliable and more relevant. The change resulted
in a $914000 increase in the beginning inventory at January 1, 2023. Assume a 25% income tax rate. The cumulative
effect of this accounting change reported for the year ended December 31, 2023 is
Ⓒ $228500.
Ⓒ$914000.
$0.
$685500.

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