In 2022, Maria Corporation changed its method of inventory pricing from LIFO to FIFO. Net income computed on a LIFO as compared to a FIFO basis for the four years involved is: (Ignore income taxes.) LIFO FIFO 2019 $79,800 $87,600 2020 84,700 88,500 2021 86,800 90,500 2022 92,300 92,800 Indicate the net income that would be shown on comparative financial statements issued at 12/31/22 for each of the four years, assuming that the company changed to the FIFO method in 2022. Net Income 2019 $ 2020 $ 2021 $ 2022 $

In 2022, Maria Corporation changed its method of inventory pricing from LIFO to FIFO. Net income computed on a LIFO as compared to a FIFO basis for the four years involved is: (Ignore income taxes.) LIFO FIFO 2019 $79,800 $87,600 2020 84,700 88,500 2021 86,800 90,500 2022 92,300 92,800 Indicate the net income that would be shown on comparative financial statements issued at 12/31/22 for each of the four years, assuming that the company changed to the FIFO method in 2022. Net Income 2019 $ 2020 $ 2021 $ 2022 $

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, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $170,000 and $273,000, respectively. Net purchases during the year at cost and at retail were $719,200 and $890,000, respectively. Markups during the year were $9,000. There were no markdowns. Net sales for 2024 were $844,400. The retail price index at the end of 2024 was 1.05. What is the inventory balance that Coldstone would report in its 12/31/2024 balance sheet? Note: Do not round intermediate calculations. Multiple Choice $249,600 $327,600 $202,760 $262,080
On January 1, 2023, Cullumber Ltd. changed its inventory valuation method from weighted-average cost to FIFO for financial statement and income tax purposes, to make its reporting as reliable and more relevant. The change resulted in a $914000 increase in the beginning inventory at January 1, 2023. Assume a 25% income tax rate. The cumulative effect of this accounting change reported for the year ended December 31, 2023 is Ⓒ $228500. Ⓒ$914000. $0. $685500.
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 $45,497,000
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.
On January 1, 2024, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $170,000 and $273,000, respectively. Net purchases during the year at cost and at retail were $719,200 and $890,000, respectively. Markups during the year were $9,000. There were no markdowns. Net sales for 2024 were $844,400. The retail price index at the end of 2024 was 1.05. What is the inventory balance that Coldstone would report in its 12/31/2024 balance sheet? Note: Do not round intermediate calculations. Multiple Choice $249,600 $327,600 $202,760 $262,080
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?