Loire Co., a calendar year-end firm, has used the FIFO method of inventory measurement since it begun operations in Year 3. Loire changed to the weighted-average method for determining inventory costs at the beginning of Year 6. Justification for this change was that it better reflected inventory flow. The following schedule shows year-end inventory balances under the FIFO and weighted-average methods: Year FIFO Weighted-Average Year 3 90,000 108,000 Year 4 156,000 142,000 Year 5 166,000 150,000 In its Year 6 financial statements, Loire included comparative statements for both Year 5 and Year 4. What adjustment, before taxes, should Loire make retrospectively to the balance reported for retained earnings at the beginning of Year 4?
Loire Co., a calendar year-end firm, has used the FIFO method of inventory measurement since it begun operations in Year 3. Loire changed to the weighted-average method for determining inventory costs at the beginning of Year 6. Justification for this change was that it better reflected inventory flow. The following schedule shows year-end inventory balances under the FIFO and weighted-average methods: Year FIFO Weighted-Average Year 3 90,000 108,000 Year 4 156,000 142,000 Year 5 166,000 150,000 In its Year 6 financial statements, Loire included comparative statements for both Year 5 and Year 4. What adjustment, before taxes, should Loire make retrospectively to the balance reported for retained earnings at the beginning of Year 4?
Loire Co., a calendar year-end firm, has used the FIFO method of inventory measurement since it begun operations in Year 3. Loire changed to the weighted-average method for determining inventory costs at the beginning of Year 6. Justification for this change was that it better reflected inventory flow. The following schedule shows year-end inventory balances under the FIFO and weighted-average methods: Year FIFO Weighted-Average Year 3 90,000 108,000 Year 4 156,000 142,000 Year 5 166,000 150,000 In its Year 6 financial statements, Loire included comparative statements for both Year 5 and Year 4. What adjustment, before taxes, should Loire make retrospectively to the balance reported for retained earnings at the beginning of Year 4?
Loire Co., a calendar year-end firm, has used the FIFO method of inventory measurement since it begun operations in Year 3. Loire changed to the weighted-average method for determining inventory costs at the beginning of Year 6. Justification for this change was that it better reflected inventory flow. The following schedule shows year-end inventory balances under the FIFO and weighted-average methods:
Year
FIFO
Weighted-Average
Year 3
90,000
108,000
Year 4
156,000
142,000
Year 5
166,000
150,000
In its Year 6 financial statements, Loire included comparative statements for both Year 5 and Year 4.
What adjustment, before taxes, should Loire make retrospectively to the balance reported for retained earnings at the beginning of Year 4?
Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.
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