Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data for 2024 are as follows: $ 140,000 Beginning inventory, FIFO (5,000 units @ $28) Purchases: 5,000 units @ $34 5,000 units @ $38 Cost of goods available for sale Sales for 2024 (6,000 units @ $74) $ 170,000 190,000 Additional Information: a. The company's effective income tax rate is 25% for all years. b. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $120,000. c. 9,000 units remained in inventory at the end of 2024. Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. What is the effect of the change in methods on 2024 net income? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the effect of the change in methods on 2024 net income? The affont of the channn for the war 2004 in 360,000 $ 500,000 $444,000 n in not at ande Mout

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In
2024, the company decided to switch to the average cost method. Data for 2024 are as follows:
$ 140,000
Beginning inventory, FIFO (5,000 units @ $28)
Purchases:
5,000 units @ $34
5,000 units @ $38
Cost of goods available for sale
Sales for 2024 (6,000 units @ $74)
$ 170,000
190,000
Additional Information:
a. The company's effective income tax rate is 25% for all years.
b. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $120,000.
c. 9,000 units remained in inventory at the end of 2024.
Required:
1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method.
2. What is the effect of the change in methods on 2024 net income?
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
What is the effect of the change in methods on 2024 net income?
The affont of the channn for the 2004 in
360,000
$ 500,000
$ 444,000
D
www
#
Tin noot af ande
Mout
Transcribed Image Text:Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data for 2024 are as follows: $ 140,000 Beginning inventory, FIFO (5,000 units @ $28) Purchases: 5,000 units @ $34 5,000 units @ $38 Cost of goods available for sale Sales for 2024 (6,000 units @ $74) $ 170,000 190,000 Additional Information: a. The company's effective income tax rate is 25% for all years. b. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $120,000. c. 9,000 units remained in inventory at the end of 2024. Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. What is the effect of the change in methods on 2024 net income? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the effect of the change in methods on 2024 net income? The affont of the channn for the 2004 in 360,000 $ 500,000 $ 444,000 D www # Tin noot af ande Mout
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