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On December 31, 2020 Mega Nhon Company changed its method of accounting for inventory from weighted average cost method to the FIFO method. This change caused the 2020 beginning inventory to increase by ₱630,000. The cumulative effect of this accounting change to be reported for the year ended 12/31/13, assuming a 40% tax rate, is ₱630,000                                                    ₱252,000 ₱378,000                                                    ₱0

On December 31, 2020 Mega Nhon Company changed its method of accounting for inventory from weighted average cost method to the FIFO method. This change caused the 2020 beginning inventory to increase by ₱630,000. The cumulative effect of this accounting change to be reported for the year ended 12/31/13, assuming a 40% tax rate, is ₱630,000                                                    ₱252,000 ₱378,000                                                    ₱0

FINANCIAL ACCOUNTING
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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On December 31, 2020 Mega Nhon Company changed its method of accounting for inventory from weighted average cost method to the FIFO method. This change caused the 2020 beginning inventory to increase by ₱630,000. The cumulative effect of this accounting change to be reported for the year ended 12/31/13, assuming a 40% tax rate, is

    1. ₱630,000                                                    ₱252,000
    2. ₱378,000                                                    ₱0

 

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