a.
FIFO:
It stands for first in first out. It is an
The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.
b.
FIFO:
It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.
To prepare: The
c.
FIFO:
It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.
Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.
d.
Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.
e.
Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.
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Chapter 21 Solutions
Intermediate Accounting
- On January 1, 2017, Chintan Corp., a 75% owned subsidiary of Victor Inc., transferred equipment with a 10-year useful life to Victor Inc. in exchange for $95,000 cash. At the date of transfer, Chintan’s records carried the equipment at a cost of $140,000 with accumulated depreciation of $60,000. Straight-line depreciation is used. Chintan reported net income of $50,000 and $42,000 for 2017 and 2018, respectively. All net income effects of the intra-entity transfer are attributed to the seller for consolidation purposes. Compute the gain recognized by Chintan Corp. relating to the equipment for 2017.helparrow_forwardWhat amount is reported for net income?arrow_forwardNet income?arrow_forward
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