In 2021, the Barton and Barton Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2020, B & B’s inventories were $32 million (FIFO). B & B’s records indicated that the inventories would have totaled $23.8 million at December 31, 2020, if determined on an average cost basis. Ignoring income taxes, what journal entry will B & B use to record the adjustment in 2021? Briefly describe other steps B & B should take to report the change.
In 2021, the Barton and Barton Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2020, B & B’s inventories were $32 million (FIFO). B & B’s records indicated that the inventories would have totaled $23.8 million at December 31, 2020, if determined on an average cost basis. Ignoring income taxes, what journal entry will B & B use to record the adjustment in 2021? Briefly describe other steps B & B should take to report the change.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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In 2021, the Barton and Barton Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2020, B & B’s inventories were $32 million (FIFO). B & B’s records indicated that the inventories would have totaled $23.8 million at December 31, 2020, if determined on an average cost basis. Ignoring income taxes, what
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