During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Fieri decided to change to the average method for both financial reporting and tax purposes. Income components before income tax for 2019, 2020, and 2021 were as follows: ($ in millions) 2019 2020 2021 Revenues $ 380 $ 390 $ 420 Cost of goods sold (FIFO) (38 ) (40 ) (46 ) Cost of goods sold (average) (52 ) (56 ) (62 ) Operating expenses (242 ) (250 ) (254 ) Dividends of $20 million were paid each year. Fieri’s fiscal year ends December 31. Required: 1. Prepare the journal entry at the beginning of 2021
During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Fieri decided to change to the average method for both financial reporting and tax purposes. Income components before income tax for 2019, 2020, and 2021 were as follows: ($ in millions) 2019 2020 2021 Revenues $ 380 $ 390 $ 420 Cost of goods sold (FIFO) (38 ) (40 ) (46 ) Cost of goods sold (average) (52 ) (56 ) (62 ) Operating expenses (242 ) (250 ) (254 ) Dividends of $20 million were paid each year. Fieri’s fiscal year ends December 31. Required: 1. Prepare the journal entry at the beginning of 2021
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 5E: Fava Company began operations in 2018 and used the LIFO inventory method for both financial...
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During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Fieri decided to change to the average method for both financial reporting and tax purposes. Income components before income tax for 2019, 2020, and 2021 were as follows: ($ in millions) 2019 2020 2021 Revenues $ 380 $ 390 $ 420 Cost of goods sold (FIFO) (38 ) (40 ) (46 ) Cost of goods sold (average) (52 ) (56 ) (62 ) Operating expenses (242 ) (250 ) (254 ) Dividends of $20 million were paid each year. Fieri’s fiscal year ends December 31. Required: 1. Prepare the
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