Goodee Bakery is considering a change in its inventory valuation method. Goodee Bakery currently uses the...

Question

Question

Goodee Bakery is considering a change in its inventory valuation method. Goodee Bakery currently uses the FIFO method and is

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Effect on closing stock = $25,700 - $21,200 = $4,500

Effect on opening stock (Reserve) = $22,000 - $21,300 = $700

Net effect = $4,500 - $700 = $3,800

Option C

Add a comment

Answer 2

Similar Homework Help Questions

Goodee Bakery is considering a change in its inventory valuation method. Goodee Bakery currently uses the...

Goodee Bakery is considering a change in its inventory valuation method. Goodee Bakery currently uses the FIFO method and is considering a change to the LIFO method. Goodee Bakery started the year on January 1 with inventory at a FIFO cost of $23,500 and a LIFO cost of $21,000. The ending inventory on December 31 is $25,600 at FIFO cost and $21,300 at LIFO cost. The LIFO effect is OA, OB. OC. O D. $2,500 $4,300 $1,800 $6,800
Problem 17.1A Computing inventory costs under different valuation methods. LO 17-1 The following data concerns inventory...

Problem 17.1A Computing inventory costs under different valuation methods. LO 17-1 The following data concerns inventory and purchases at Muse Company. 95 units at $108 Inventory, January 1 Purchases: January 6 January 15 January 22 Inventory, January 31 65 units at $107 50 units at $107 40 units at $101 93 units a. Determine the cost of the ending inventory on January 31 under the average cost method. b. Determine the cost of the ending inventory on January 31 under...
ATW Corporation currently uses the FIFO method of accounting for its inventory for book and tax...

ATW Corporation currently uses the FIFO method of accounting for its inventory for book and tax purposes. Its beginning inventory for the current year was $8,000,000. Its ending inventory for the current year was $7,000,000. If ATW had been using the LIFO method of accounting for its inventory, its beginning inventory would have been $7,000,000 and its ending inventory would have been $5,500,000. Problem 5-30 Part a a. How much more in taxes did ATW Corporation pay for the current...

Best Care Company began operations on January 1, 2017, and uses the FIFO method in costing...

Best Care Company began operations on January 1, 2017, and uses the FIFO method in costing its raw material inventory. Management changed the inventory valuation method to the LIFO method in 2018. Corporate accounting staff has determined what effect such a change will have on net income. The Tax Rate is 40% for all years. Accordingly, the following information has been developed 2017 2018 Net Income (computed under the FIFO method $500,000 $750,000 Ending Inventory under FIFO method $320,000 $400,000...
Patch Grove Nursery uses the LIFO inventory accounting method. Maria Hu", president, wants to determine the...

Patch Grove Nursery uses the LIFO inventory accounting method. Maria Hu", president, wants to determine the !nancial statement impact of changing to the FIFO accounting method. Selected company information follows: Year-end inventory: $22,000 LIFO reserve: $4,000 Change in LIFO reserve: $1,000 LIFO cost of goods sold: $18,000 After-tax income: $2,000 Tax rate: 40% Under FIFO, the nursery's ending inventory and after-tax pro!t for the year would have been: FIFO ending inventory FIDO after-tax profit A) $18,000 $2,600 B) $26,000 $2,600...
Problem 17.1A Computing inventory costs under different valuation methods. LO 17-1 The following data concerns inventory...

Problem 17.1A Computing inventory costs under different valuation methods. LO 17-1 The following data concerns inventory and purchases at Muse Company. bok 95 units at $108 int Inventory, January 1 Purchases: January 6 January 15 January 22 Inventory, January 31 ences 65 units at $107 50 units at $107 40 units at $101 93 units a. Determine the cost of the ending inventory on January 31 under the average cost method. b. Determine the cost of the ending inventory on...

Carolina Company uses the LIFO method for valuing its ending inventory. The following financial statement information...

Carolina Company uses the LIFO method for valuing its ending inventory. The following financial statement information is available for its first year of operation: Carolina Company Income Statement For the year ended December 31 Sales 60,000 Cost of Goods sold 23,000 Gross Profit 37,000 Expenses 13,000 Income before taxes $ 24,000 Carolina's ending inventory using the LIFO method was $8,700. Carolina's accountant determined that had the company used FIFO, the ending inventory would have been $9,100 . a. Determine what...
5. During 2014, Brookside Trading decided to change from the FIFO method of inventory valuation to...

5. During 2014, Brookside Trading decided to change from the FIFO method of inventory valuation to the weighted average method. Inventory balances under each method were as follows: January 1 December 31 FIFO 7,200,000 7,900,000 Weighted Average 7,700,000 8,300,000 Ignoring income tax, compute for the amount that should be reported as the effect of the accounting change in the statement of changes in equity for 2014,
Harvey's Junk Jewelry started business January 1, 2021, and uses the LIFO retail method to estimate...

Harvey's Junk Jewelry started business January 1, 2021, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated for the year ended December 31, 2021: Cost Retail Beginning inventory $ 16,300 $ 24,300 Purchases 50,300 84,500 Freight-in 3,800 Purchase returns 3,000 3,900 Net markups 5,200 Net markdowns 6,700 Net sales 71,900 Employee discounts 2,000 To the nearest thousand, the estimated ending inventory at cost is (round cost-to-retail ratio to whole percentage):

On January 31, 2011, the Company elected to change its costing method for the material component...

On January 31, 2011, the Company elected to change its costing method for the material component of raw materials, work in process, and finished goods inventory to the lower of cost or market using the first-in first-out ("FIFO") method, from the lower of cost or market using the last-in first out ("LIFO") method. The labor and overhead components of inventory have historically been valued on a FIFO basis. The Company believes that the FIFO method for the material component of...

Goodee Bakery is considering a change in its inventory valuation method. Goodee Bakery currently uses the...

Homework Answers