Cullumber Inc. began operations on January 1, 2023, and uses the FIFO method of pricing inventory. Management is contemplating a change in inventory methods for 2026. The following information is available for the years 2023-2025: 2023 2024 2025 (a) (b) (c) Average-Cost Method $109,000 Net Income Computed Using: FIFO Method $120,000 79,000 167,000 70,000 * Your answer is incorrect. Retained Earnings 146,000 Inventory Assume Cullumber Inc. used the average cost method instead of the FIFO method during the years 2023-2025. In 2026, Cullumber changed to the LIFO method. Prepare the journal entry necessary to record the change in principle. (Ignore tax considerations.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation LIFO Method $79,000 51,000 130,000 Debit 65000 Credit 65000

Cullumber Inc. began operations on January 1, 2023, and uses the FIFO method of pricing inventory. Management is contemplating a change in inventory methods for 2026. The following information is available for the years 2023-2025: 2023 2024 2025 (a) (b) (c) Average-Cost Method $109,000 Net Income Computed Using: FIFO Method $120,000 79,000 167,000 70,000 * Your answer is incorrect. Retained Earnings 146,000 Inventory Assume Cullumber Inc. used the average cost method instead of the FIFO method during the years 2023-2025. In 2026, Cullumber changed to the LIFO method. Prepare the journal entry necessary to record the change in principle. (Ignore tax considerations.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation LIFO Method $79,000 51,000 130,000 Debit 65000 Credit 65000

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Description: Account final Cullumber Inc. began operations on January 1, 2023, and uses the FIFO method of pricing inventory. Management is contemplating achange in inventory methods for 2026. The following information is available for the years 2023-2025:2023202

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 69BPSB

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