se the following to answer the four questions below:Presented below is X Corporation's selected data for 2020:Retained Eamings, January 1, 2020$900,000Net Income88,200Stock dividends declared14,280During the year, the company changed its inventory methodfrom FIFO to LIFO whidecrease in inconehad resulted in a net of tax11,000Cash dividends declared21,000During 2020, the company discovered that the 2019depreciation expense were overstated by a pretax amount of10,000Таx rate30% 10,000depreciation expense were overstated by a pretax amount ofTax rate30%Based on the data above, the changes in the accounting principles (from FIFO toLIFO) hadDecreased retained earnings by S7,700Decreased retained earnings by $3,300Decreased retained earnings by $11,000None of the aboveBased on the data above, the prior period adjustment (related to the 2019depreciation expense) had -Increased retained earnings by $7.000

Solution: based on above data, the changes in accounting principles, (FIFO to LIFO) had "Decreased…

Net Income 88,200 Stock dividends declared 14,280 During the year, the company changed its inventory method from FIFO to LIFO which had resulted in a net of tax decrease in inconhe Cash dividends declared 11,000 21,000

Net Income 88,200 Stock dividends declared 14,280 During the year, the company changed its inventory method from FIFO to LIFO which had resulted in a net of tax decrease in inconhe Cash dividends declared 11,000 21,000

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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