Megall Company began operations on Jan. 1, YR1. For tax purposes, Megall has always used FIFO method of inventory method, and will continue to do so. For financial reporting purpose, Megall has used LIFO. During YR3, Megall decides to change from the LIFO to the FIFO method of inventory valuation. Had Megall always used the FIFO method, COGS would have been lower by $25,000 in YR1 and lower by $35,000 in YR2. The tax rate is 35% every year. Prepare the necessary journal entry Megall will record in YR3 when it changes from the LIFO to the FIFO method. SECTION 3 - Q2 Fill in the blanks with either T (True) or F (False). Only input T or F. 1) Had Megall used FIFO, Inventory would have been higher by 15,000. 2) In YR1 and YR2, COGS on the Tax Book was higher. 3) This resulted in a deductible temporary difference.

Megall Company began operations on Jan. 1, YR1. For tax purposes, Megall has always used FIFO method of inventory method, and will continue to do so. For financial reporting purpose, Megall has used LIFO. During YR3, Megall decides to change from the LIFO to the FIFO method of inventory valuation. Had Megall always used the FIFO method, COGS would have been lower by $25,000 in YR1 and lower by $35,000 in YR2. The tax rate is 35% every year. Prepare the necessary journal entry Megall will record in YR3 when it changes from the LIFO to the FIFO method. SECTION 3 - Q2 Fill in the blanks with either T (True) or F (False). Only input T or F. 1) Had Megall used FIFO, Inventory would have been higher by 15,000. 2) In YR1 and YR2, COGS on the Tax Book was higher. 3) This resulted in a deductible temporary difference.

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 2RE: Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of...

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