Larkspur Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management iscontemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020.201820192020Average-Cost Method$15,9902018Net Income Computed Using2019Account Titles and Explanation18,140$20,140$FIFO Method$19,000Net Income20,900(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (Creditaccount titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "NoEntry" for the account titles and enter O for the amounts.)25,090LIFO Method$12,01013,960(b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle.17,050DebitCredit (b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle.201820192020Net Income(c) Assume Larkspur Company used the LIFO method instead of the average cost method during the years 2018-2020. In 2021,Larkspur changed to the FIFO method. Prepare the journal entry necessary to record the change in principle. (Credit account titlesare automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts.)Account Titles and ExplanationDebitCredit

Name: Larkspur Company began operations on January 1, 2018, and uses the av
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Description: Larkspur Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management iscontemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020.2018201920

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Larkspur 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 Average-Cost Method. 2018 Net Income Computed Using FIFO Method 2019 $15,990 Account Titles and Explanation $ 18,140 $ 20,140 (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 0 for the amounts.) $19,000 20,900 25,090 LIFO Method Net Income $12,010 (b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle. 13,960 17,050 Debit Credit

Larkspur 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 Average-Cost Method. 2018 Net Income Computed Using FIFO Method 2019 $15,990 Account Titles and Explanation $ 18,140 $ 20,140 (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 0 for the amounts.) $19,000 20,900 25,090 LIFO Method Net Income $12,010 (b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle. 13,960 17,050 Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Crane Company uses a periodic inventory system and the average cost method. At December 31, 2025, the following information has been compiled for its finished goods inventory: Replacement value Cost Expected selling price Normal profit margin Selling costs $13100 $14900 $15380 15% 5% of expected selling price After applying LCNRV, Crane, which uses the cost of goods sold method to record inventory write-downs, will make an entry O crediting Inventory for $480. O debiting Cost of Goods Sold for $289. O crediting Cost of Goods Sold for $1800. O debiting Inventory Loss for $480.
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View Policies Current Attempt in Progress Whispering Inc. uses LIFO inventory costing. At January 1, 2025, inventory was $211,879 at both cost and market value. At Decembe 31, 2025, the inventory was $287,291 at cost and $270,300 at market value. Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method and (b) the loss method. (List all debit entries before credit entries. 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.) No. Account Titles and Explanation (a) (b) List of Accounts Save for Later O Search Debit co DELL Attempts: 0 of 15 used M Credit 1 Submit Answer
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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 Credit
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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…
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