Question 2Grouper Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020.201820192020Net Income Computed UsingAverage-Cost Method FIFO Method$15,910$19.06021,17025,2002018(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter O for the amounts.)Account Titles and Explanation201918,170$19,880$(b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle.2020 $LIFO Method$12,01014,11017,040Net IncomeDebitAccount Titles and ExplanationCredit(c) Assume Grouper Company used the LIFO method instead of the average cost method during the years 2018-2020. In 2021, Grouper changed to the FIFO method. Prepare the journal entry necessary to record the change in principle. (Credit account titles areautomatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)DebitCredit

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Description: Question 2Grouper Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020.

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rouper Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020. 2018 2019 2020 Net Income Computed Using Average-Cost Method FIFO Method LIFO Method $15,910 $19,060 21.170 25,200 18,170 19,880 17,040 a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation $12,010 14,110 Net Income Debit Credit b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change accounting principle.

rouper Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020. 2018 2019 2020 Net Income Computed Using Average-Cost Method FIFO Method LIFO Method $15,910 $19,060 21.170 25,200 18,170 19,880 17,040 a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation $12,010 14,110 Net Income Debit Credit b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change accounting principle.

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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