mnces under the FIFO and average cost methods: r FIFO Average Cost $54,200 8 $45,100 9 78,300 71,100 0 83,400 78,300 uired: horing income taxes, prepare the 2021 journal entry to adjust

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to
the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory
balances under the FIFO and average cost methods:
Year FIFO Average Cost
2018 $45,100
2019 78,300
2020 83,400
$54,200
71,100
78,300
Required:
1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method.
2. How much higher or lower would cost of goods sold be in the 2020 revised income statement?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
How much higher or lower would cost of goods sold be in the 2020 revised income statement?
Cost of goods sold for 2020 would be
in the revised income statement.
Required 2 >
< Required 1
Transcribed Image Text:Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2018 $45,100 2019 78,300 2020 83,400 $54,200 71,100 78,300 Required: 1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. 2. How much higher or lower would cost of goods sold be in the 2020 revised income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much higher or lower would cost of goods sold be in the 2020 revised income statement? Cost of goods sold for 2020 would be in the revised income statement. Required 2 > < Required 1
Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to
the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory
balances under the FIFO and average cost methods:
Year FIFO Average Cost
2018 $45,100
2019 78,300
2020 83,400
$54,200
71,100
78,300
Required:
1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method.
2. How much higher or lower would cost of goods sold be in the 2020 revised income statement?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required
for a transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
Record the adjustment necessary to reflect the average cost method.
Note: Enter debits before credits.
Transcribed Image Text:Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2018 $45,100 2019 78,300 2020 83,400 $54,200 71,100 78,300 Required: 1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. 2. How much higher or lower would cost of goods sold be in the 2020 revised income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the adjustment necessary to reflect the average cost method. Note: Enter debits before credits.
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