Strathmore Inc. reported 2022 sales ($ in millions) of $6,280 and a cost of goods sold of $4,870. The company uses the LIFO method for inventory valuation. It discloses that if the FIFO inventory valuation method had been used, inventories would have been $81.6 million and $68.2 million higher in 2022 and 2021, respectively. If Strathmore used the FIFO method exclusively, what would its 2022 gross profit be closest to? a. $1,310.4 million b. $1,460.6 million c. $1,423.4 million d. $1,393.2 million

Strathmore Inc. reported 2022 sales ($ in millions) of $6,280 and a cost of goods sold of $4,870. The company uses the LIFO method for inventory valuation. It discloses that if the FIFO inventory valuation method had been used, inventories would have been $81.6 million and $68.2 million higher in 2022 and 2021, respectively. If Strathmore used the FIFO method exclusively, what would its 2022 gross profit be closest to? a. $1,310.4 million b. $1,460.6 million c. $1,423.4 million d. $1,393.2 million

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 5E: Fava Company began operations in 2018 and used the LIFO inventory method for both financial...

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Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?
Sheinberg Industries reported 2023 sales ($ in millions) of $6,842 and a cost of goods sold of $5,120. The company uses the LIFO method for inventory valuation. It discloses that if the FIFO inventory valuation method had been used, inventories would have been $89.6 million and $73.2 million higher in 2023 and 2022, respectively. If Sheinberg used the FIFO method exclusively, it would have reported 2023 gross profit closest to? a. $1,110.5 million b. $1,319.1 million c. $1,738.4 million
Sheinberg Industries reported 2023 sales ($ in millions) of $6,842 and a cost of goods sold of $5,120. The company uses the LIFO method for inventory valuation. It discloses that if the FIFO inventory valuation method had been used, inventories would have been $89.6 million and $73.2 million higher in 2023 and 2022, respectively. If Sheinberg used the FIFO method exclusively, it would have reported 2023 gross profit closest to? a. $1,110.5 million b. $1,319.1 million c. $1,738.4 million MCQ
In 2024, the Barton and Barton Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2023, B & B’s inventories were $32.2 million (FIFO). B & B’s records indicated that the inventories would have totaled $23.9 million at December 31, 2023, if determined on an average cost basis. Ignoring income taxes, what journal entry will B & B use to record the adjustment in 2024? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Sauerbraten Corp. reported 2007 sales ($ in millions) of $2,157 and a cost of goods sold of $1,827. The company uses the LIFO method for inventory valuation. It discloses that if the FIFO inventory valuation method had been used, inventories would have been $63.3 million and $56.8 million higher in 2007 and 2006, respectively. If Sauerbraten used the FIFO method exclusively, it would have reported 2007 gross profit closest to? a. $324. b. $330. c. $337.
It would have reported 2007 gross profit closest to ?
In 2022, Kimberly Corporation changed its method of inventory pricing from LIFO to FIFO. Net income computed on a LIFO as compared to a FIFO basis for the four years involved is: (Ignore income taxes.) LIFO FIFO 2019 $78,600 $87,400 2020 84,000 88,900 2021 86,800 90,600 2022 92,800 92,200 (a)Indicate the net income that would be shown on comparative financial statements issued at 12/31/22 for each of the four years, assuming that the company changed to the FIFO method in 2022. Net Income 2019 $ 2020 $ 2021 $ 2022 $
During 2025, Vaughn Company changed from FIFO to weighted-average inventory pricing. Pretax income in 2024 and 2023 (Vaughn's first year of operations) under FIFO was $172,490 and $196,830, respectively. Pretax income using weighted-average pricing in the prior years would have been $154,000 in 2024 and $188,000 in 2023. In 2025, Vaughn reported pretax income (using weighted- average pricing) of $220,600. Show comparative income statements for Vaughn, beginning with "Income before income tax as presented on the 2025 income statement. (The tax rate in all years is 3096) Income before income tax Income tax Net income $ $ 2025 2024 $ $ 2023
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In 2022, Kimberly Corporation changed its method of inventory pricing from LIFO to FIFO. Net income computed on a LIFO as compared to a FIFO basis for the four years involved is: (Ignore income taxes.) LIFO FIFO 2019 $78,600 $87,400 2020 84,000 88,900 2021 86,800 90,600 2022 92,800 92,200 Assume that the company had switched from the average cost method to the FIFO method with net income on an average cost basis for the four years as follows: 2019, $80,400; 2020, $86,120; 2021, $90,300; and 2018, $93,600. Indicate the net income that would be shown on comparative financial statements issued at 12/31/22 for each of the four years under these conditions. Net Income 2019 $ 2020 $ 2021 $ 2022 $
Below is the net income of New Girl Instrument AG, a private company, computed under the two inventory methods using a periodic system. FIFO Average-Cost 2017 $26,000 $23,000 2018 30,000 25,000 2019 29,000 27,000 2020 34,000 30,000 (ignore tax considerations) Required: a. Assume that in 2020 New Girl decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2020, and show net income reported for 2017, 2018, 2019, and 2020. b. Assume that in 2020 New Girl, which had been using the average-cost method since beginning operations in 2017, changed to the FIFO method of pricing inventories. Prepare the journal entry necessary to record the change in 2020, and show net income reported for 2017, 2018, 2019, and 2020.
In 2022, Maria Corporation changed its method of inventory pricing from LIFO to FIFO. Net income computed on a LIFO as compared to a FIFO basis for the four years involved is: (Ignore income taxes.) LIFO FIFO 2019 $79,800 $87,600 2020 84,700 88,500 2021 86,800 90,500 2022 92,300 92,800 Indicate the net income that would be shown on comparative financial statements issued at 12/31/22 for each of the four years, assuming that the company changed to the FIFO method in 2022. Net Income 2019 $ 2020 $ 2021 $ 2022 $