On December 31, 2021, ECHO Company appropriately changed its inventory valuation method to the FIFO cost method from the average cost method for financial statement and income purposes. The change will result in a P350,000 increase in the beginning inventory on January 1, 2021.
On December 31, 2021, ECHO Company appropriately changed its inventory valuation method to the FIFO cost method from the average cost method for financial statement and income purposes. The change will result in a P350,000 increase in the beginning inventory on January 1, 2021.
Chapter10: Inventory
Section: Chapter Questions
Problem 14EA: If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance...
Related questions
Question
Assuming an income tax rate of 30%, how much is the cumulative effect of this change that should be reported in the income statement for the year ended December 31, 2021?
![On December 31, 2021, ECHO Company appropriately changed its inventory valuation
method to the FIFO cost method from the average cost method for financial statement and
income purposes. The change will result in a P350,000 increase in the beginning inventory
on January 1, 2021.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9e1443fd-158c-471a-8fb4-fb98bff1e339%2Fc9cfa2ab-5e3a-40e1-896e-16580e27132b%2F8m9c0b9_processed.png&w=3840&q=75)
Transcribed Image Text:On December 31, 2021, ECHO Company appropriately changed its inventory valuation
method to the FIFO cost method from the average cost method for financial statement and
income purposes. The change will result in a P350,000 increase in the beginning inventory
on January 1, 2021.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning