PROBLEM 2: (CHANGE IN ACCOUNTING POLICY) Shilo Co. has been using the weighted average method of inventory costing since it began operations in 2018. Shilo Co. has reported the following net income: Net income Under Weighted Average Method P 400,000 285,000 2018 2019 2020 320,000 Beginning 2021 the company decided to change the inventory cost formula to FIFO method. The following are the December 31 inventory balances under each method: 2018 2019 2020 MI, end Per Books (Weighted Average) P 180,000 250,000 330,000 MI, End (FIFO) P 200,000 310,000 440,000 MI, End Per Books Understated By P 20,000 60,000 110,000 Compute for the following: a. Restated net income for 2019 and 2020 as a result of the change in policy b. Adjustment to the accumulated profits beginning balance of 2021 as a result of the
PROBLEM 2: (CHANGE IN ACCOUNTING POLICY) Shilo Co. has been using the weighted average method of inventory costing since it began operations in 2018. Shilo Co. has reported the following net income: Net income Under Weighted Average Method P 400,000 285,000 2018 2019 2020 320,000 Beginning 2021 the company decided to change the inventory cost formula to FIFO method. The following are the December 31 inventory balances under each method: 2018 2019 2020 MI, end Per Books (Weighted Average) P 180,000 250,000 330,000 MI, End (FIFO) P 200,000 310,000 440,000 MI, End Per Books Understated By P 20,000 60,000 110,000 Compute for the following: a. Restated net income for 2019 and 2020 as a result of the change in policy b. Adjustment to the accumulated profits beginning balance of 2021 as a result of the
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 36BE: Effects of Inventory Costing Methods Refer to the information for Tyler Company above. Required: 1....
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