Homework Answers
Solution:- Change in accounting principle is the correct answer.
Explanation:-Change in accounting principle would include a change in the method of inventory pricing. so a change in the method of inventory pricing from FIFO to LIFO would be accounted for as a change in accounting principle.
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Question 19 (2 points) A change in the method of inventory pricing from FIFO to LIFO...
Joey Co. decided to switch from LIFO method of costing inventories to the FIFO method at...
Joey Co. decided to switch from LIFO method of costing inventories to the FIFO method at the beginning of 2018 [1/1/2019]. The inventory as reported at the end of 2016 using LIFO would have been $60,000 higher using FIFO. Retained earnings had been reported at 12/31/2018 as $780,000 [reflecting the LIFO method]. The Tax rate is 40% 1). Calculate the balance in retained earnings at the time of the change [beginning of 20191 as it would have been reported if...
Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO...
Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2018. The inventory as reported at the end of 2017 using LIFO would have been $64,000 higher using FIFO. Retained earnings at the end of 2017 was reported as $820,000 (reflecting the LIFO method). The tax rate is 34%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2018) as it would...
In 2018, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end...
In 2018, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2017 of $106,000 would have been $124,000 if FIFO had been used. Inventory at the end of 2018 is $138,000 using the new FIFO method but would have been $130,000 if the company had continued to use LIFO What is the effect of the change on 2018 cost of goods sold? higher 2018 cost of goods sold is
When a company changes from LIFO to another inventory method, the change is reported Multiple Choice...
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.
Sage Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory....
Sage Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,860
$18,810
$12,090
2016
18,010
20,800
14,140
2017
19,970
24,990
16,870
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
Vaughn Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory....
Vaughn Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,900
$19,170
$12,110
2016
17,880
20,980
13,990
2017
20,180
25,060
17,120
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
EKG Corp. uses the LIFO method for accounting for inventory. Its LIFO inventory balance on December...
EKG Corp. uses the LIFO method for accounting for inventory. Its LIFO inventory balance on December 31, 2014 is $65,000. COGS under LIFO during 2014 was $50,000. EKG Corp. further discloses in the notes of its 2014 annual report that the inventory balance on December 31, 2014 would have been $90,000 if the company used the FIFO method. (6 points) As of the end of December 31, 2014, how much had EKG reduced its income taxes over the life of...
Practice Brief Exercise 4-5 During 2017, Metlock Inc. changed from LIFO to FIFO inventory pricing. Metlock...
Practice Brief Exercise 4-5 During 2017, Metlock Inc. changed from LIFO to FIFO inventory pricing. Metlock began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $470,000 and $568,000, respectively. Pretax income using FIFO pricing in the prior years would have been $501,000 in 2015 and $622,000 in 2016. In 2017, Metlock reported pretax income using FIFO pricing of $585,000. Show comparative income statements for Metlock beginning with "Income before income tax," as presented in...
Practice Brief Exercise 4-5 During 2017, Metlock Inc. changed from LIFO to FIFO inventory pricing. Metlock...
Practice Brief Exercise 4-5 During 2017, Metlock Inc. changed from LIFO to FIFO inventory pricing. Metlock began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $520,000 and $602,000, respectively. Pretax income using FIFO pricing in the prior years would have been $554,000 in 2015 and $662,000 in 2016. In 2017, Metlock reported pretax income using FIFO pricing of $629,000. Show comparative income statements for Metlock beginning with wIncome before income tax," as presented n...
29. The pricing of issues from inventory must be deferred until the end of the accounting...
29. The pricing of issues from inventory must be deferred until the end of the accounting period under the following method of inventory valuation: [a] moving-average. [b] weighted average. (c) LIFO perpetual. [d] FIFO.
Joey Co. decided to switch from LIFO method of costing inventories to the FIFO method at the beginning of 2018 [1/1/2019]. The inventory as reported at the end of 2016 using LIFO would have been $60,000 higher using FIFO. Retained earnings had been reported at 12/31/2018 as $780,000 [reflecting the LIFO method]. The Tax rate is 40% 1). Calculate the balance in retained earnings at the time of the change [beginning of 20191 as it would have been reported if...
In 2018, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2017 of $106,000 would have been $124,000 if FIFO had been used. Inventory at the end of 2018 is $138,000 using the new FIFO method but would have been $130,000 if the company had continued to use LIFO What is the effect of the change on 2018 cost of goods sold? higher 2018 cost of goods sold is
Sage Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,860
$18,810
$12,090
2016
18,010
20,800
14,140
2017
19,970
24,990
16,870
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
Vaughn Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,900
$19,170
$12,110
2016
17,880
20,980
13,990
2017
20,180
25,060
17,120
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
Practice Brief Exercise 4-5 During 2017, Metlock Inc. changed from LIFO to FIFO inventory pricing. Metlock began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $470,000 and $568,000, respectively. Pretax income using FIFO pricing in the prior years would have been $501,000 in 2015 and $622,000 in 2016. In 2017, Metlock reported pretax income using FIFO pricing of $585,000. Show comparative income statements for Metlock beginning with "Income before income tax," as presented in...
Practice Brief Exercise 4-5 During 2017, Metlock Inc. changed from LIFO to FIFO inventory pricing. Metlock began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $520,000 and $602,000, respectively. Pretax income using FIFO pricing in the prior years would have been $554,000 in 2015 and $662,000 in 2016. In 2017, Metlock reported pretax income using FIFO pricing of $629,000. Show comparative income statements for Metlock beginning with wIncome before income tax," as presented n...
29. The pricing of issues from inventory must be deferred until the end of the accounting period under the following method of inventory valuation: [a] moving-average. [b] weighted average. (c) LIFO perpetual. [d] FIFO.
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