Question 10
When changing inventory methods from any other method to LIFO:
A) The change is reported retrospectively on all financial statements, and disclosure notes are needed
B) The change is reported retrospectively on all financial statements, and no disclosure notes are needed
C) The LIFO method is just used from that point forward and no disclosure notes are needed
D) The LIFO method is just used from that point forward but disclosure notes are needed
Solution:
When changing inventory methods from any other method to LIFO "The change is reported retrospectively on all financial statements, and disclosure notes are needed"
Hence option A is correct.
Question 10 When changing inventory methods from any other method to LIFO: A) The change is...
Swifty Co. decides at the beginning of 2017 to adopt the FIFO method of inventory valuation. Swifty had used the LIFO method for financial reporting since its inception on January 1, 2015, and had maintained records adequate to apply the FIFO method retrospectively. Swifty concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost...
When a company changes from LIFO to another inventory method, the change is reported Multiple Choice as a change in an accounting estimate. prospectively because it is impractical to determine the effects of this change on prior years’ net income. as an error correction. using the retrospective approach.
Question 19 (2 points) A change in the method of inventory pricing from FIFO to LIFO would be accounted for as a (an): a) change in estimate b) accounting error c) part of discontinued operations d) change in accounting principle
1. is Golf Challenge's change from LIFO TO FIFO ethics ?
Consider whether such a change would be misleading to
investors.
2. under what type of circumstance should a company be
permitted to change inventory costing methods?
Beyond the Numbers A10 BTN 5.1 Golf Challenge Corp. is a retail sports store carrying golf apparel and equipment. The store is at ETHICS the end of its second year of operation and is struggling. A major problem is that its cost of...
Question 10 --/1 View Policies Current Attempt in Progress The dollar-value LIFO method was adopted by Coronado Corp. on January 1, 2020. Its inventory on that date was $279,100. On December 31, 2020, the inventory at prices existing on that date amounted to $257,600. The price level at January 1, 2020, was 100, and the price level at December 31, 2020, was 112. Compute the amount of the inventory at December 31, 2020, under the dollar-value LIFO method. Inventory 12/31/20...
Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2018 decided to change to the FIFO method. The inventory as reported at the end of 2017 using LIFO would have been $13 million higher using FIFO. Retained earnings reported at the end of 2016 and 2017 was $233 million and $253 million, respectively (reflecting the LIFO method). Those amounts reflecting the FIFO method would have been $243 million and $265 million, respectively. 2017 net...
When changing from the average cost method to FIFO, the company: Multiple Choice a. Includes in current year’s income the cumulative after-tax difference that would have resulted if the company had used FIFO in all prior years. b. Revises comparative financial statements. c. Records a journal entry to adjust the book balances from their current amounts to what those balances would have been using FIFO. d. All of these answer choices are correct.
Question 8 Bryer Company has used the FIFO method of valuing its inventory for the prior 12 years. The accountants at Bryer Company would like to switch to LIFO since the economy is suffering from severe inflation. For the switch to occur Bryer Company cannot make a change to its inventory valuation method once a method is chosen. Bryer Company must remain consistent and keep LIFO in place for a minimum of 15 years. Bryer Company must remain consistent with...
enerally Accepted Accounting Principles (GAAP) allow companies to choose any inventory costing method, although the consistency principle requires that they not switch between methods on a regular basis. However, many companies still change methods from one year to the next. Perform research on this topic in order to address the below questions. Make sure to cite your sources: Why is consistency important in the first place? What are some valid reasons companies may decide to switch methods? How does the...
When changing from the average cost method to FIFO, the company: Multiple Choice Includes in current year’s income the cumulative after-tax difference that would have resulted if the company had used FIFO in all prior years. Revises comparative financial statements. Records a journal entry to adjust the book balances from their current amounts to what those balances would have been using FIFO. All of these answer choices are correct. Next