Sheridan Company began operations on January 1, 2023, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2026. The following information is available for the years 2023-2025. 2023 2024 2025 Net Income Computed Using Average-Cost Method FIFO Method LIFO Method $15,990 $19,000 $12,010 20,900 25,090 (Ignore all tax effects) 18,140 20,140 13,960 17,050
Sheridan Company began operations on January 1, 2023, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2026. The following information is available for the years 2023-2025. 2023 2024 2025 Net Income Computed Using Average-Cost Method FIFO Method LIFO Method $15,990 $19,000 $12,010 20,900 25,090 (Ignore all tax effects) 18,140 20,140 13,960 17,050
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Sheridan Company began operations on January 1, 2023, and uses the average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2026. The following information is available for the years 2023-2025.
2023
2024
2025
(Ignore all tax effects.)
(a)
Net Income Computed Using
FIFO Method
$19,000
20,900
Average-Cost Method
$15,990
18,140
20,140
25,090
LIFO Method
$12,010
13,960
17,050
Prepare the journal entry necessary to record a change from the average-cost method to the FIFO method in 2026. (Credit account
titles are automatically indented when the 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. List debit entry before credit entry)
Account Titles and Explanation
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52615ebc-3deb-446b-94e8-8fddbf33eb42%2Faca4c511-b060-4403-9242-0e8eae7bd82b%2Ffffdv3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sheridan Company began operations on January 1, 2023, and uses the average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2026. The following information is available for the years 2023-2025.
2023
2024
2025
(Ignore all tax effects.)
(a)
Net Income Computed Using
FIFO Method
$19,000
20,900
Average-Cost Method
$15,990
18,140
20,140
25,090
LIFO Method
$12,010
13,960
17,050
Prepare the journal entry necessary to record a change from the average-cost method to the FIFO method in 2026. (Credit account
titles are automatically indented when the 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. List debit entry before credit entry)
Account Titles and Explanation
Debit
Credit
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