In 2024, Banchero Corp. changed from a FIFO cost flow assumption to average cost flow assumption for inventory valuation in financial reporting. Banchero's tax rate is 20%, and Banchero has used, and will continue to use FIFO for tax reporting purposes. Below is a summary of cost of goods sold, as calculated under both methods, for Banchero's first three years of operations. 2022 2023 2024 FIFO COGS $213,100 $219,900 $213,400 Average cost COGS $247,600 $222,300 $240,600 Implementing the accounting change in 2024 will require a debit (enter as a positive number) or a credit (enter as a negative number) to retained earnings for what amount?
In 2024, Banchero Corp. changed from a FIFO cost flow assumption to average cost flow assumption for inventory valuation in financial reporting. Banchero's tax rate is 20%, and Banchero has used, and will continue to use FIFO for tax reporting purposes. Below is a summary of cost of goods sold, as calculated under both methods, for Banchero's first three years of operations. 2022 2023 2024 FIFO COGS $213,100 $219,900 $213,400 Average cost COGS $247,600 $222,300 $240,600 Implementing the accounting change in 2024 will require a debit (enter as a positive number) or a credit (enter as a negative number) to retained earnings for what amount?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:In 2024, Banchero Corp. changed from a FIFO cost flow assumption to average cost flow
assumption for inventory valuation in financial reporting. Banchero's tax rate is 20%, and Banchero
has used, and will continue to use FIFO for tax reporting purposes. Below is a summary of cost of
goods sold, as calculated under both methods, for Banchero's first three years of operations.
2022
2023
2024
FIFO COGS
$213,100
$219,900
$213,400
Average cost COGS
$247,600
$222,300
$240,600
Implementing the accounting change in 2024 will require a debit (enter as a positive number) or a
credit (enter as a negative number) to retained earnings for what amount?
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