During 2022, Emerald Inc. decided to change from FIFO method of inventory valuation to the weighted average method. January 1 inventory under FIFO 7,100,000 January 1 inventory under weighted average 7,700,000 December 31 inventory under FIFO 7,900,000 December 31inventory under weighted average 8,300,000 What is the effect on January 1, 2022 inventory and on Retained Earnings?
During 2022, Emerald Inc. decided to change from FIFO method of inventory valuation to the weighted average method. January 1 inventory under FIFO 7,100,000 January 1 inventory under weighted average 7,700,000 December 31 inventory under FIFO 7,900,000 December 31inventory under weighted average 8,300,000 What is the effect on January 1, 2022 inventory and on Retained Earnings?
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 71BPSB
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During 2022, Emerald Inc. decided to change from FIFO method of
January 1 inventory under FIFO 7,100,000
January 1 inventory under weighted average 7,700,000
December 31 inventory under FIFO 7,900,000
December 31inventory under weighted average 8,300,000
What is the effect on January 1, 2022 inventory and on
A. January 1, 2022 inventory understated and Retained Earnings overstated
B. January 1, 2022 inventory overstated and Retained Earnings overstated
C. January 1, 2022 inventory understated and Retained Earnings understated
D. No effect.
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