Ignoring income tax considerations, prepare the entry to report this accounting change.
Q: basis. On January 1 of Year 5, Ohio changed to dollar-value LIFO for external reporting and income…
A: LIFO (Last in first out) This method is based on the idea that the most recent purchases in your…
Q: Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in 2021.…
A: FIFO (First-In, First-Out) and average cost method are two common inventory valuation methods used…
Q: Diderot Stores Inc., which uses the conventional retail inventory method, wishes to change to the…
A: Conventional retail inventory method is related upon the relationship between cost of product and…
Q: Blossom Inc. uses LIFO inventory costing. At January 1,2020, inventory was $216,195 at both cost and…
A:
Q: In 2018, Wade Window and Glass changed its inventory method from FIFO to LIFO. Inventory at the end…
A: FIFO: Under this inventory method, the units that are purchased first, are sold first. Thus, it…
Q: Emily Company uses a periodic inventory system. At the end of the annual accounting period, December…
A: Income tax is a tax levied on the income of the company . It is imposed by the government . The…
Q: Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the…
A: The amount that remains after expenses, benefits, and taxes are subtracted from the earnings of a…
Q: In 2016, Adonis Industries changed its method of valuing inventory from the average cost method to…
A: Calculate the changes in inventory value.
Q: Crane Electronics uses a perpetual inventory system which, at the company's year-end December 31,…
A: Inventory is the goods that an entity has, for the purpose of sale. It is current asset for the…
Q: Some of E and S Electronics' merchandise is gathering dust. It is now December 31, 2024, and the…
A: According to accounting standard, inventory should be valued at lower of cost or market…
Q: The management of Swifty Inc. is reevaluating the appropriateness of using its present inventory…
A: Income Statement :— It is one of the financial statement that shows profitability, total revenue and…
Q: On December 31, 2021 Carla Vista Company changed its method of accounting for inventory from…
A: An increase in beginning inventory due to a change in the method of inventory decreases the profit.…
Q: Volata Company began operations on January 1, 2023. In the second quarter of 2024, it adopted the…
A: The amount that remains after expenses, benefits, and taxes are subtracted from the earnings of a…
Q: 3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO…
A: Solution:- Given, Revenue = $390 mil Cost of goods sold FIFO = $39 mil ; Average = $54 mil…
Q: koopman Company began operations on January 1, 2018, and uses the FIFO inventory method for…
A: Financial Statement- Financial statements contain information on an entity's financial activity and…
Q: At the begining of 2020, Flynne Company decided to change from the LIFO to the FIFO inventory cost…
A: Comment- Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
Q: The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost…
A: Journal entries- Journal entries refer to the authorised book of a corporation which is used to…
Q: During 2021, WMC Corporation discovered that its ending inventories reported in its financial…
A: Journal entry shows the recording of transactions during an accounting year and every transaction…
Q: Eagle Resources, which uses the FIFO inventory costing method, has the following account balances at…
A: FIFO is inventory valuation method where the inventory came first in store will be sold first and…
Q: The management of Knight Company has asked its accounting department to describe the effect upon the…
A: It is the stock held for sale to customers. The inventory comprises of raw materials, work in…
Q: Boyle Company uses the perpetual inventory system. At the end of the current fiscal year, the…
A: The adjustment needed for the discrepancy between the ledger balance and the physical count of…
Q: Volata Company began operations on January 1, 2019. In the second quarter of 2020, It adopted the…
A: Inventory valuationInventory valuation method is an accounting practice that is followed by each and…
Q: Naylor, Inc. uses a perpetual inventory system. It records its inventory at lower-of-cost-or-net…
A: Lower of Cost or Net Realizable Value (NRV) Method: This is a method of recording ending inventory…
Q: 2023 2024 2025 Net Income Computed Using Average-Cost Method FIFO Method $15,900 $19,170 17,880…
A: The first in first out method is one of the important methods of valuing inventory in which the…
Q: December 31 2024 2025 2026 2027 $ $ $ Year-End Costs 96,460 131,100 141,120 $ $ Base-Year Costs…
A: DVL stands for Dollar Value LIFO method. LIFO stands for Last in first out.
Q: During 2019 (its first year of operations) and 2020, Flerl Foods used the FIFO Inventory costing…
A: Retained earnings shows the income income of the company which the company has accumulated over a…
Q: Rockets Inc. changed from LIFO to the FIFO inventory costing method on January 1, 2021. Inventory…
A: LIFO is that inventory valuation method under which inventories which are purchased in last will be…
Q: Carl Co. began operations in 2021. At the beginning of fiscal year 2023, Carl Co. decided to change…
A: The objective of the question is to determine the correct journal entry to record the change in…
Q: During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing…
A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS Prepare the journal entry at the beginning of 2013…
Q: Gladstone Company tracks the number of units purchased and sold throughout each accounting period…
A: Perpetual inventory system is one of the inventory systems that continuosly updates its costing…
Q: Required: 1. Restate the statement of earnings to reflect the valuation of the ending Inventory on…
A: Smart Company Statement of Earnings (LC & NRV Basis) For the Year Ended Dec 31, 2020 Sales…
Q: Wolfpack Corp. has the following normal account balances on 12/31/22 before the year-end adjustment…
A: Inventory: Inventory in accounting terms can be explained as inputs like raw materials, parts,…
Q: Givoly Inc. uses a periodic inventory system. At the end o the accounting records provided the…
A:
Q: In 2018, Adonis Industries changed its method of valuing inventory from the average cost method to…
A: FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the…
Q: Marigold Inc. uses LIFO inventory costing. At January 1, 2025, inventory was $211,649 at both cost…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: Required: Prepare the journal entries assuming that inventory is recorded at LCNRV and that MRW…
A: Inventory valuation is important aspect while preparing financial statements as it determines the…
Q: Fog Gear Incorporated changed from LIFO to the FIFO inventory costin January 1, 2024. Inventory…
A: Introduction:- Journal entry is the first stage of accounting process. Journal entry used to record…
Q: Nutritional Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing…
A: INVENTORY VALUATIONInventory Valuation is a Method of Calculation of Value of Inventory at the End…
Q: Required: 1. Prepare the journal entry at January 1, 2024, to the deferred tax liability account.)…
A: The record of day-to-day transactions in the books of accounts is called journal entries. In a…
Q: 2019 2020 1stQ $ 31,000 6,100 4,100 $ 20,800 5,200 2ndQ $ 33,000 7,100 4,300 $ 21,600 5,400 3rdQ $…
A:
Q: (Change to LIFO Retail) John Olerud Ltd., a local retailing concern in the Bronx, New York, has…
A:
Q: Vermont Resources, which uses the FIFO inventory costing method, has the following account balances…
A: The question is based on the concept of Financial Accounting.
Q: Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the…
A: Net Income :— It is the difference of total revenue and total expenses. FIFO :— It is one of the…
Q: Sampress, Inc., reported inventory in the 2020 year-end balance sheet, using the average cost…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Macintosh Inc. changed from LIFO to the FIFO inventory costing method on January 1, 2018. Inventory values at the end of each year since the inception of the company are as follows:
| FIFO | LIFO | |||||
| 2016 | $ | 209,000 | $ | 184,500 | ||
| 2017 | 418,000 | 369,000 | ||||
Required:
Ignoring income tax considerations, prepare the entry to report this accounting change. (If no entry is required for a transaction/event, select "No
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Fieri decided to change to the average method for both financial reporting and tax purposes. Income components before income tax for 2019, 2020, and 2021 were as follows: ($ in millions) Revenues Cost of goods sold (FIFO) Cost of goods sold (average) Operating expenses 2019 2020 $ 520 $ 510 (51) (78) (294) 2021 $ 550 (53) (82) (302) (306) (59) (88) Dividends of $32 million were paid each year. Fieri's fiscal year ends December 31. Required: 1. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle. (Ignore income taxes.) 2. Prepare the 2021-2020 comparative income statements. 3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO method and determine the adjustment of balance in retained earnings as on January 1, 2020 using…A čompany uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 9, 2021, for $57,000 and then sells this inventory on account on March 7, 2021, for $74,000. Record the transactions for the purchase and sale of the inventory. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list EX: ...... Record the purchase of inventory on account. 2 Record the sale of inventory on account. Record the cost of inventory sold. Credit Note : journal entry has been entered %3D View general journal Clear entry Record entryThe Cecil Booker Vending Company changed is method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2021. At December 31, 2020, inventories were $130,000 (average cost basis) and were $134,000 a year earlier. Cecil-Booker’s accountants determined that the inventories would have totaled $175,000 at December 31, 2020, and $180,000 at December 31, 2019, if determined on a FIFO basis. A tax rate of 25% is in effect for all years. One hundred thousand common shares were outstanding each year. Income from continuing operations was $500,000 in 2020 and $625,000 in 2021. There were no discontinued operations either year. Required: Prepare the journal entry at January 1, 2021, to record the change in accounting principle. (All tax effects should be reflected in the deferred tax liability account) Prepare the 2021-2020 comparative income statements beginning with income from continuing operations (adjusted for any revisions) include per share…
- On January 1, 2023 , Linda Corp. changed from the average cost to the dollar value LIFO method for accounting for inventory. The change results in a decrease in ending inventory of $45,497,000 for the year. How should the effect of this change be reported by Linda Corp. in 2023? (RE& CF 1) As an increase to beginning RE of $ 45,497,000 As a decrease to beginning RE of $45,497,000 As an increase to net income of $45,497,000 As a decrease to net income of $45,497,000Vermont Resources, which uses the FIFO inventory costing method, has the following account balances at October 31, 2025, prior to releasing the financial statements for the year: $ Merchandise Inventory, ending Cost of Goods Sold Net Sales Revenue 15,500 72,000 122,000 Requirement 1. Prepare any adjusting journal entry required from the given information. (Record debits first, then credits. Select the explanation on the last line of the journal entry. For situations that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.) Accounts and Explanation Date Oct. 31 Debit Vermont has determined that the current replacement cost (current market value) of the October 31, 2025, ending merchandise inventory is $12,000. Read the requirements. CreditOn 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.
- Coronado uses LIFO inventory costing. At January 1, 2020, inventory was $427,200 at both cost and market value. At December 31, 2020, the inventory was $543,600 at cost and $511,200 at market value. Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method and (b) loss method. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (a) (b)Windsor Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020. 2018 2019 2020 Net Income Computed Using Average-Cost Method $16,080 17,980 19,920 FIFO Method LIFO Method $18,980 $11,940 14,020 17,050 20,800 24,890 (a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (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.) Account Titles and Explanation Debit CreditGoddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2018 $45,100 2019 78,300 2020 83,400 $54,200 71,100 78,300 Required: 1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. 2. How much higher or lower would cost of goods sold be in the 2020 revised income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the adjustment…
- Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for financial and income tax reporting on January 1, 2021. Webster continues to use the FIFO method for internal decision-making purposes. Webster's FIFO inventories at December 31, 2021, 2022, and 2023, were $300.000, $412.500, and $585,000, respectively. Internally generated cost indexes are used to convert FIFO inventory amounts to dollar-value LIFO amounts. Webster estimated these indexes as follows: 2021 2022 2823 1.00 1.25 1.50 Required: 1. Determine Webster's dollar-value LIFO inventory at December 31, 2022 and 2023. 2. Will Webster account for the change (a) retrospectively or (b) prospectively? 1. LIFO inventory at 2022 LIFO inventory at 2023 2. Webster account for the changeWMC uses a periodic inventory system and the FIFO cost method. Required: 1. Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors.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…
