Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2016. The inventory as reported at the end of 2015 using LIFO would have been $60,000 higher using FIFO. Retained earnings at the end of 2015 was reported as $780,000 (reflecting the LIFO method). The tax rate is 40%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2016) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2016 to record the change in accounting principle.

Q: Sanborn Inc. is a new manufacturing company founded on February 2, 2012. The company had to choose…

A: FIFO: FIFO stands for First-In, First-Out.  In this method inventory purchased first will be sell…

Q: Hammond Company adopted LIFO when it was formed on January 1, 2017. Since then, the company has had…

A: LIFO liquidation seems to be the process of selling older items or material in a firm's stock at a…

Q: Chavez Wholesale Inc. changed its method of valuing inventory from the average cost method to the…

A: To generate a journal entry, you enter transaction records into your company's books. Your journal…

Q: Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2021…

A:

Q: Inventory Year-End Costs Cost Index December 31, 2004 $438,000 1.05 December 31, 2005 460,000…

A: The right answer is option c. $368,400

Q: 3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO…

A: Solution:- Given, Revenue = $390 mil Cost of goods sold FIFO = $39 mil ; Average = $54 mil…

Q: In 2021, the Barton and Barton Company changed its method of valuing inventory from the FIFO method…

A: Change in the method of inventory valuation: Changing the method of inventory valuation is a change…

Q: Ignoring income tax considerations, prepare the entry to report this accounting change.

A: Given are the inventory values for year 2016 and 2017 as per LIFO method and FIFO method.

Q: Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the…

A: Last in, first out (LIFO) cost flow method assumes that the last units of inventory are sold first.…

Q: ndi Khough Alam Corporation appropriately changed its inventory costing method from FIFO cost to…

A: Impact of change in the evaluating of Inventory from FIFO to Weighted Average.

Q: Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax…

A: 1. Prepare journal entry to record the change in value of inventory value.

Q: Wolfgang Kitchens has always used the FIFO inventory costing method for both financial reporting and…

A: 1.

Q: In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020…

A:

Q: Shown below are net income amounts as they would be determined by Weihrich Steel Company by each of…

A: Change in accounting principle: This generally mean, the valuation principles of certain type of…

Q: Bridgeport Co. reported before-tax income of $427,000 in 2017 and $323,000 for 2018. However, the…

A: In order to calculate the corrected income before taxes for 2017 and 2018, all the errors effecting…

Q: Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The…

A:

Q: Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2018…

A:

Q: In 2020, Bevins Company decided to change from LIFO to FIFO due to better representation of the flow…

A: GIVEN     In 2020, Bevins Company decided to change from LIFO to FIFO due to better representation…

Q: During its second and third quarters of fiscal 2014, BlackBerry Limited wrote down its…

A: Accounting equation:   Accounting equation is an accounting tool expressed in the form of equation,…

Q: Ibri Company decided in in 31-12-2020 to change from FIFO to Weighted average inventory pricing. The…

A: The Income tax is described as the amount which is charged by the tax authorities on the amount of…

Q: Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for…

A:

Q: On January 1, 2016, Omega Company has 16,000 units in its beginning inventory. During the year, the…

A: Given, Beginning Inventory = 16,000 unit Variable Cost = P6 per unit Fixed Cost = P4 per unit

Q: MLM Bhd started operations on 1 January 2015 and has used the FIFO method of inventory valuation…

A: MFRS 108 - It defines prior period errors as"omissions from, and misstatements in the entity's…

Q: At December 31, 2017, Ashley Co. has outstanding purchasecommitments for 150,000 gallons, at $6.20…

A: Describe the way in which the given situation is treated in the accounts:Compute the loss on…

Q: The Churchill Corporation uses a periodic inventory system and the LIFO inventory cost method for…

A: First-in-First-Out (FIFO): In First-in-First-Out method, the cost of initial purchased items are…

Q: CMN Inc. uses LIFO and has experienced increasing costs since its founding. CMN disclosed that the…

A: Formula: LIFO Reserve = Valuation as per FIFO – Valuation as per LIFO

Q: Carswell Electronics adopted the dollar-value LIFO method on January 1, 2016, when the inventory…

A: Dollar value LIFO method: In this method, the aggregate cost of inventory is compiled to layers for…

Q: During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing…

A: Part 1:

Q: In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020…

A: LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…

Q: Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the…

A: A journal entry is used to record day-to-day transactions of the business by debiting and crediting…

Q: Victor Manufacturing Co., switched from FIFO to LIFO on January 1, 2004 for external reporting and…

A: The dollar value correlated with the items in inventory at the close of an accounting cycle is known…

Q: During 2017, Teal Mountain Inc. changed from LIFO to FIFO inventory pricing. Teal Mountain began…

A: Preparing the new income statement with a comparative figure is quite straightforward. Just replace…

Q: Millington Materials is a leading supplier of building equipment, building products, materials &…

A: 1.

Q: During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing…

A: The income statement is one of the important financial statement of the business which is prepared…

Q: Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the…

A: Adjusted Net Income=Ending inventory Differential amount×100-Tax rate%=$66,000×100-40%=$39,600

Q: Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The…

A: Inventory costing, often known as inventory cost accounting, is the process through which businesses…

Q: SLR Corporation has 1,000 units of each of its two products in its year-end inventory. Per unit data…

A: Net realizable value means the amount that could be received after deducted all incidental expenses…

Q: Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The…

A: Changes in the inventory valuation method have a retrospective effect on the net income for the…

Q: In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020…

A: The cost of goods sold is the difference between total units available for sale and ending…

Q: In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020…

A: Computation of Change in Inventory Value Particular FIFO LIFO Opening Inventory $ 137,000 $…

Q: In 2016, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2015…

A: Describe the steps that Company H should take to report this changeThe steps that Company H should…

Q: Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2016…

A:

Q: Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the…

A: 1.

Q: Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the…

A: Change in Accounting Principle: When an entity decides to change the valuation principle of its…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.