Martinez Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation. Martinez had used the LIFO method for financial reporting since its inception on January 1, 2018, and had maintained records adequate to apply the FIFO method retrospectively. Martinez concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Income taxes are ignored. Inventory Determined by Cost of Goods Sold Determined by Date LIFO Method FIFO Method LIFO Method FIFO Method January 1, 2018 $ 0 $ 0 $ 0 $ 0 December 31, 2018 100 8 850 942 December 31, 2019 180 250 990 828 December 31, 2020 310 400 1,230 1,210 Retained earnings reported under LIFO are as follows. Other information: 1. For each year presented, sales are $2,780 and operating expenses are $1,010. 2. Martinez provides two years of financial statements. Earnings per share information is not required. Prepare income statements reflecting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2020 and 2019. MARTINEZ CO. Income Statement For the Year Ended December 31 2019 2020 select an income statement item $enter a dollar amount $enter a dollar amount select an income statement item enter a dollar amount enter a dollar amount select an income statement item enter a dollar amount enter a dollar amount select a closing name for this statement $enter a total net income or loss amount $enter a total net income or loss amount eTextbook and Media Prepare comparative retained earnings statements for 2019 and 2020 under FIFO. 2019 2020 select an opening name $enter a dollar amount $enter a dollar amount select between addition and deduction : select an item enter a dollar amount enter a dollar amount select a summarizing line for the first part $enter a total amount for the first part enter a total amount for the first part select an item enter a dollar amount enter a dollar amount select a closing name

Martinez Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation. Martinez had used the LIFO method for financial reporting since its inception on January 1, 2018, and had maintained records adequate to apply the FIFO method retrospectively. Martinez concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Income taxes are ignored. Inventory Determined by Cost of Goods Sold Determined by Date LIFO Method FIFO Method LIFO Method FIFO Method January 1, 2018 $ 0 $ 0 $ 0 $ 0 December 31, 2018 100 8 850 942 December 31, 2019 180 250 990 828 December 31, 2020 310 400 1,230 1,210 Retained earnings reported under LIFO are as follows. Other information: 1. For each year presented, sales are $2,780 and operating expenses are $1,010. 2. Martinez provides two years of financial statements. Earnings per share information is not required. Prepare income statements reflecting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2020 and 2019. MARTINEZ CO. Income Statement For the Year Ended December 31 2019 2020 select an income statement item $enter a dollar amount $enter a dollar amount select an income statement item enter a dollar amount enter a dollar amount select an income statement item enter a dollar amount enter a dollar amount select a closing name for this statement $enter a total net income or loss amount $enter a total net income or loss amount eTextbook and Media Prepare comparative retained earnings statements for 2019 and 2020 under FIFO. 2019 2020 select an opening name $enter a dollar amount $enter a dollar amount select between addition and deduction : select an item enter a dollar amount enter a dollar amount select a summarizing line for the first part $enter a total amount for the first part enter a total amount for the first part select an item enter a dollar amount enter a dollar amount select a closing name

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 3P: Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for...

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	Inventory Determined by	Cost of Goods Sold Determined by
Date	LIFO Method	FIFO Method	LIFO Method	FIFO Method
January 1, 2018	$ 0	$ 0	$ 0	$ 0
December 31, 2018	100	8	850	942
December 31, 2019	180	250	990	828
December 31, 2020	310	400	1,230	1,210

eTextbook and Media

Prepare comparative retained earnings statements for 2019 and 2020 under FIFO.

	2019	2020
select an opening name	$enter a dollar amount	$enter a dollar amount
select between addition and deduction : select an item	enter a dollar amount	enter a dollar amount
select a summarizing line for the first part	$enter a total amount for the first part	enter a total amount for the first part
select an item	enter a dollar amount	enter a dollar amount
select a closing name

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