During 2010, Orca Corp. decided to change from the FIFO method of inventory valuation to the weighted-average method. Inventory balances under each method were as follows: FIFO Weighted-average January 1, 2010 71,000 77,000 December 31, 2010 79,000 83,000 Orca’s income tax rate is 30%. In its 2010 financial statements, what amount should Orca report as the cumulative effect of this accounting change? a.2,800 b.4,000 c.4,200 d.6,000
During 2010, Orca Corp. decided to change from the FIFO method of inventory valuation to the weighted-average method. Inventory balances under each method were as follows: FIFO Weighted-average January 1, 2010 71,000 77,000 December 31, 2010 79,000 83,000 Orca’s income tax rate is 30%. In its 2010 financial statements, what amount should Orca report as the cumulative effect of this accounting change? a.2,800 b.4,000 c.4,200 d.6,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 11P: Olson Company adopted the dollar-value LIFO method for inventory valuation at the beginning of 2015....
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During 2010, Orca Corp. decided to change from the FIFO method of
FIFO Weighted-average
January 1, 2010 71,000 77,000
December 31, 2010 79,000 83,000
Orca’s income tax rate is 30%.
In its 2010 financial statements, what amount should Orca report as the cumulative effect of this accounting change?
a.2,800
b.4,000
c.4,200
d.6,000
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