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Humanoid Company has been using the FIFO method of inventory costing since it began operations in 2019. In 2021 the company changed to the weighted average method (WAM). The following are the December 31 inventory balances under each method. Year FIFO WAM 2019 500,000 565,000 2020 450,000 560,000 2021 895,000 999,000 What is the effect on retained earnings as a result of making the change on January 1, 2021? OP 110,000 increase O P 6,000 decrease

Humanoid Company has been using the FIFO method of inventory costing since it began operations in 2019. In 2021 the company changed to the weighted average method (WAM). The following are the December 31 inventory balances under each method. Year FIFO WAM 2019 500,000 565,000 2020 450,000 560,000 2021 895,000 999,000 What is the effect on retained earnings as a result of making the change on January 1, 2021? OP 110,000 increase O P 6,000 decrease

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Humanoid Company has been using the FIFO method of inventory costing since it began operations in 2019. In 2021 the company changed to the weighted average method (WAM). The following are the December 31 inventory balances under each method. Year FIFO WAM 2019 500,000 565,000 2020 450,000 560,000 2021 895,000 999,000 What is the effect on retained earnings as a result of making the change on January 1, 2021? OP 110,000 increase OP 6,000 decrease O P 214,000 increase OP 104,000 increase
Transcribed Image Text:Humanoid Company has been using the FIFO method of inventory costing since it began operations in 2019. In 2021 the company changed to the weighted average method (WAM). The following are the December 31 inventory balances under each method. Year FIFO WAM 2019 500,000 565,000 2020 450,000 560,000 2021 895,000 999,000 What is the effect on retained earnings as a result of making the change on January 1, 2021? OP 110,000 increase OP 6,000 decrease O P 214,000 increase OP 104,000 increase
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