FTC Company had used the FIFO method of inventory valuation since it began operations in 2016. The entity de change to the weighted average method for measuring inventory at the beginning of 2019. The income tax rate The following schedule shows year-end inventory balances: Year FIFO Weighted Average 2016 P4,500,000 P5,400,000 2017 7,800,000 7,100,000 2018 8,300,000 7,800,000 What amount should be reported for 2019 as the cumulative effect of the change in accounting policy?

FTC Company had used the FIFO method of inventory valuation since it began operations in 2016. The entity de change to the weighted average method for measuring inventory at the beginning of 2019. The income tax rate The following schedule shows year-end inventory balances: Year FIFO Weighted Average 2016 P4,500,000 P5,400,000 2017 7,800,000 7,100,000 2018 8,300,000 7,800,000 What amount should be reported for 2019 as the cumulative effect of the change in accounting policy?

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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On January 1, 2024, a Company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $660,000. The 2024 and 2025 ending inventory valued at year-end costs were $690,000 and $760,000, respectively. The appropriate cost indexes are 1.04 for 2024 and 1.08 for 2025. Required: Complete the below table to calculate the inventory value at the end of 2024 and 2025 using the dollar-value LIFO method.
How much is the cumulative effect of this change that should be reported in the income statement for the year ended December 31, 2021?
During 2022, Emerald Inc. decided to change from FIFO method of inventory valuation to the weighted average method. January 1 inventory under FIFO 7,100,000 January 1 inventory under weighted average 7,700,000 December 31 inventory under FIFO 7,900,000 December 31inventory under weighted average 8,300,000 In the statement of retained earnings for 2022, what amount should be reported as the pretax cumulative effect of this accounting change? (A) 1,000,000 deduction (B) 1,000,000 addition C 600,000 deduction D 600,000 addition
On January 1, 2020, Crow Company changed from FIFO to LIFO for income tax and external reporting purpos- es. On that same date, the beginning FIFO inventory (the base inventory for LIFO purposes) was $95,000. The following information is available from Crow's records for years 2020 through 2023. Year 2020 2021 2022 2023 Ending Inventory on a FIFO Basis Ending Inventory at Base Year Costs $113,600 84,600 85,200 92,900 a. $125,000 110,000 115,000 130,000 Required Compute the price indices used to calculate ending inventory at base year costs. Round to two decimals. Hint: Divide ending inventory on a FIFO basis by ending inventory at base year for each year. b. Compute the ending inventory on a dollar-value LIFO basis for each year, 2020 through 2023. Prepare the journal entry at each year-end, 2020 through 2023, to adjust inventory to LIFO.
A. FF Co. changed its inventory valuation from the FIFO cost method to the weighted averagemethod during 2020:FIFO Weighted AverageJanuary 1, 2020 inventory 4,000,000 4,500,000December 31, 2020 inventory 4,800,000 5,100,000Required: Ignoring income taxes,1. Prepare the journal entry to adjust the 2020 opening balance of retained earnings account.2. Determine the net income under the weighted average method assuming that the netincome under FIFO was determined to be P900,000.
Presented below is information related to Kingbird, Inc. End-of-Year Inventory Price Date (End-of-Year Prices) Index December 31, 2017 $ 1,200,000 100 December 31, 2018 1,522,500 105 December 31, 2019 1,562,000 110 December 31, 2020 1,813,500 117 Compute the ending inventory for Kingbird, Inc. for 2017 through 2020 using the dollar-value LIFO method. Ending Inventory 2017 2018 2019 2020 $ %24 %24
On January 2, 2022, TITAN Company changed its inventory cost flow method to FIFO from average for both financial statements and income tax reporting purposes. The change resulted in a P800,000 increase in the beginning inventory on January 1, 2022. Ignoring income tax, the accounting change should preferably be reported by the company in its year 2022 as? A. ₱ 800,000 as debit adjustment to the beginning balance of retained earnings B. ₱ 800,000 credit to the income statement C. ₱ 800,000 debit to the income statement D. ₱ 800,000 as credit adjustment to the beginning balance of retained earnings
Current Attempt in Progress Marigold Inc. uses a perpetual inventory system. At January 1, 2025, inventory was $368,080 at both cost and net realizable value. At December 31, 2025, the inventory was $491,920 at cost and $455,800 at net realizable value. Prepare the entry under (a) the cost-of-goods-sold method and (b) the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation (a) (b) e Textbook and Media List of Accounts Save for Later Debit Credit Attempts: 1 of 3 used Submit Answer
Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company’s interim income statements as originally reported under the LIFO method follow: 2019 2020 1stQ 2ndQ 3rdQ 4thQ 1stQ Sales $ 14,000 $ 16,000 $ 18,000 $ 20,000 $ 22,000 Cost of goods sold (LIFO) 4,400 5,400 6,200 7,400 8,900 Operating expenses 2,400 2,600 3,000 3,400 3,600 Income before income taxes $ 7,200 $ 8,000 $ 8,800 $ 9,200 $ 9,500 Income taxes (25%) 1,800 2,000 2,200 2,300 2,375 Net income $ 5,400 $ 6,000 $ 6,600 $ 6,900 $ 7,125 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2019 2020 1stQ 2ndQ 3rdQ 4thQ…
Richardson’s Flower Depot uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2020, the following information was obtained from the inventory records: 2018 2019 2020 Ending inventory, FIFO $78,650 $82,785 $93,678 Ending inventory, LIFO 68,500 75,640 84,675 Beginning inventory, FIFO 67,535 78,650 82,785 Beginning inventory, LIFO 74,565 68,500 75,640 Required: 1. Prepare the necessary entry to convert to LIFO at the end of 2020. 2. How much would Richardson’s cost of goods sold differ in 2020 if it used FIFO for external reporting?
3. How much is the cumulative effect of this change that should be reported in the income statement for the year ended December 31, 2021?