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Pronghorn Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Pronghorn had used the LIF method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Pronghorn concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Date January 1, 2023 December 31, 2023 December 31, 2024 December 31, 2025 Other informations 2 Inventory Determined by LIFO Method $0 100 190 330 FIFO Method $0 90 250 420 Cost of Goods Sold Determined by LIFO Method FIFO Method $0 800 920 1,160 $0 810 850 1.130 For each year presented, sales are $2,960 and operating expenses are $920. Pronghorn provides two years of financial statements. Earnings per share information is not required.

Pronghorn Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Pronghorn had used the LIF method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Pronghorn concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Date January 1, 2023 December 31, 2023 December 31, 2024 December 31, 2025 Other informations 2 Inventory Determined by LIFO Method $0 100 190 330 FIFO Method $0 90 250 420 Cost of Goods Sold Determined by LIFO Method FIFO Method $0 800 920 1,160 $0 810 850 1.130 For each year presented, sales are $2,960 and operating expenses are $920. Pronghorn provides two years of financial statements. Earnings per share information is not required.

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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Prepare income statements reporting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2025 and 2024. eTextbook and Media S PRONGHORN CO. Income Statement 2024 2025
Transcribed Image Text:Prepare income statements reporting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2025 and 2024. eTextbook and Media S PRONGHORN CO. Income Statement 2024 2025
Pronghorn Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Pronghorn had used the LIFO method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Pronghorn concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Date January 1, 2023 December 31, 2023 December 31, 2024 December 31, 2025 Other informations 2 Inventory Determined by LIFO Method FIFO Method $0 100 190 330 $0 90 250 420 Cost of Goods Sold Determined by LIFO Method FIFO Method $0 800 920 1,160 $0 810 850 1,130 For each year presented, sales are $2.960 and operating expenses are $920. Pronghorn provides two years of financial statements. Earnings per share information is not required.
Transcribed Image Text:Pronghorn Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Pronghorn had used the LIFO method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Pronghorn concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Date January 1, 2023 December 31, 2023 December 31, 2024 December 31, 2025 Other informations 2 Inventory Determined by LIFO Method FIFO Method $0 100 190 330 $0 90 250 420 Cost of Goods Sold Determined by LIFO Method FIFO Method $0 800 920 1,160 $0 810 850 1,130 For each year presented, sales are $2.960 and operating expenses are $920. Pronghorn provides two years of financial statements. Earnings per share information is not required.
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