piotua incone as of year-end 2015? Explain. Assume GE has a 35% income tax rate. As of the 2015 year-end, how much has GE saved in by choosing LIFO over FIFO method for costing inventory? Has the use of LIFO i creased GE's cumulative taxes paid? d increased or de e. What effect has the use of LIFO inventory costing had on GE's pretax income and tax expense 2015 only (assume a 35% income tax rate)? E6-25) Computing Cost of Sales and Ending Inventory Howell Company has the following financial records for the current period. Units Unit Cost Beginning inventory . .. 150 $100 96 92 90 #2 500 Ending inventory is 350 units. Compute the ending inventory and the cost of goods sold for the current period using (a) first-in, first-out, (b) average cost, and (c) last-in, first-out. Analyzing an Inventory Footnote Disclosure The inventory footnote from Deere & Company's 2015 10-K follows. E6-26. Inventories Most inventories owned by Deere& Company and its U.S equipment subsidiar- es are valued at cost, on the "last-in, first-out" (LIFO) basis. Remaining inventories are gener- ally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or market. The value of gross inventories on the LIFO basis represented 66 percent and 65 percent of worldwide gross inventories at FIFO value at October 31, 2015 and 2014, respectively. If all inventories had been alued on a FIFO ba sis, estimated inventories by major classification at October 31 in millions

Wolfgang Kitchens has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2016, Wolfgang decided to change to the LIFO method. Net income in 2016 was correctly stated as $90 million. If the company had used LIFO in 2015, its cost of goods sold would have been higher by $7 million that year. Company accountants are able to determine that the cumulative net income for all years prior to 2015 would have been lower by $23 million if LIFO had been used all along, but have insufficient information to determine specific effects of using LIFO in 2014. Last year, Wolfgang reported the following net income amounts in its comparative income statements: ($ in millions) 2015 2014 2013 Net income $94 $92 $90 Required: 1. Prepare the journal entry at the beginning of 2016 to record the change in accounting principle. (Ignore income taxes.) 2. Briefly describe other steps Wolfgang will take to report the change. 3. What amounts will Wolfgang…

d. Kroger reported net earnings of $1,728 million in its fiscal year 2014 income statement. Assuming a 35% tax rate, what amount of net earnings would Kroger report if the company used the FIFO inventory costing method?

Quality Manufacturers uses the LIFO cost flow assumption to value inventory. For the year 2009, it reported the following information in its financial statements: Revenue = $5.1 million Cost of goods sold = $1.3 million Other expenses = $2.5 million Interest expenses = $0.6 million Tax expenses = $0.42 million Beginning inventory = $8.3 million Ending inventory = $7.4 million Beginning LIFO reserve = $0.72 million Ending LIFO reserve = $0.83 million Tax rate = 35%   Quality Manufacturers' net income, if it used the FIFO cost flow assumption, will be closest to:   $318,500 $351,500 $0.3185

GHIST Co. reported a net income of P2,100,000 for 2020. It incurred operating expenses other than interest expense, at 40% of cost of sales but only 20% of sales. Interest expense is 5% of sales. Purchases is 120% of the cost of sales and ending inventory is twice the beginning inventory. If the company is subject to 30% income tax, how much is the company's sales for the year? *a. P10,000,000b. P12,000,000c. P15,000,000d. P18,000,000e. answer not given

Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2016, Flay decided to change to the LIFO method. As a result of the change, net income in 2016 was $80 million. If the company had used LIFO in 2015, its cost of goods sold would have been higher by $6 million that year. Flay’s records of inventory purchases and sales are not available for 2014 and several previous years. Last year, Flay reported the following net income amounts in its comparative income statements: ($ in millions) 2015 2014 2013 Net income $84 $82 $80 Required: 1. Prepare the journal entry at the beginning of 2016 to record the change in accounting principle. (Ignore income taxes.) 2. Briefly describe other steps Flay will take to report the change. 3. What amounts will Flay report for net income in its 2016–2014 comparative income statements?

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 $ 420   $ 430   $ 460   Cost of goods sold (FIFO)   (42 )   (44 )   (50 ) Cost of goods sold (average)   (60 )   (64 )   (70 ) Operating expenses   (258 )   (266 )   (270 )    Dividends of $23 million were paid each year. Fieri’s fiscal year ends December 31. Required:1. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle. (Ignore income taxes.)2. Prepare the 2021–2020 comparative income statements.3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO method and determine the adjustment of balance…

Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFOmethod at the beginning of 2018. The inventory as reported at the end of 2017 using LIFO would have been$60,000 higher using FIFO. Retained earnings at the end of 2017 was reported as $780,000 (reflecting the LIFOmethod). The tax rate is 40%.Required:1. Calculate the balance in retained earnings at the time of the change (beginning of 2018) as it would have beenreported if FIFO had been used in prior years.2. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle

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 $ 390   $ 400   $ 430   Cost of goods sold (FIFO)   (39 )   (41 )   (47 ) Cost of goods sold (average)   (54 )   (58 )   (64 ) Operating expenses   (246 )   (254 )   (258 )    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 to record the change in accounting principle. (Ignore income taxes.)2. Prepare the 2021–2020 comparative income statements.3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO method and determine the adjustment of balance…

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                                                                                        $ 540          $  550         $  580 Cost of goods sold (FIFO)                                                             (54)             (56)             (62) Cost of goods sold (average)                                                      (84)              (88)…