Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in 2021. Goldmeyer decided to change to the average cost method for determining inventory costs at the beginning of 2024. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2021 $ 45,100 $ 54,200 2022 78,300 71,100 2023 83,400 78,300 Required: Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. How much higher or lower would cost of goods sold be in the 2023 revised income statement?
Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in 2021. Goldmeyer decided to change to the average cost method for determining inventory costs at the beginning of 2024. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2021 $ 45,100 $ 54,200 2022 78,300 71,100 2023 83,400 78,300 Required: Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. How much higher or lower would cost of goods sold be in the 2023 revised income statement?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Goldmeyer Company has used the FIFO method of
| Year | FIFO | Average Cost |
|---|---|---|
| 2021 | $ 45,100 | $ 54,200 |
| 2022 | 78,300 | 71,100 |
| 2023 | 83,400 | 78,300 |
Required:
- Ignoring income taxes, prepare the 2024
journal entry to adjust the accounts to reflect the average cost method. - How much higher or lower would cost of goods sold be in the 2023 revised income statement?
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