Sugarbaker Designs Inc. changed from the FIFO inventory costing method to the average cost method during 2021. Which items from the 2020 financial statements should be restated on the basis of the average cost method when reported in the 2021 comparative financial statements?
Q: The Genworth Company adopted the dollar-valu LIFO method on January 1, 2021 when the inventory value…
A: Inventory at the end: It refers to the stock in hand at the end of the year and reported in the…
Q: Upon reviewing the draft of the financial statements for the year ended, December 31, 2022, Alocasia…
A: Following is the correct option.
Q: At 31 December 2019, Alpha Ltd still had the same three different products in its inventory. The…
A:
Q: Crane Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…
A: Working: Item D Item E Item F Item G Item H Item I Selling price (A) $ 122.00…
Q: Sheridan Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…
A: Lets understand the basics. As per IAS 2 "Inventories", inventory should be recorded at lower of…
Q: Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2021…
A:
Q: Waterway Company began operations on January 1, 2018, and uses the average-cost method of pricing…
A: Given: - For 2018: Average cost method=$16,110 FIFO method=$18,880 LIFO method=$12,030 For 2019:…
Q: Sugarbaker Designs, Inc., changed from the FIFO inventory costing method to the average cost method…
A:
Q: Moss Company has determined its December 31,2019 inventory on a FIFO basis to be P4,000,000.…
A: LCM or the lower of cost or market method is used to value a company’s inventory. The inventory is…
Q: 3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO…
A: Solution:- Given, Revenue = $390 mil Cost of goods sold FIFO = $39 mil ; Average = $54 mil…
Q: a. Prepare income statements under average-cost and FIFO for 2017, 2018, and 2019.
A: Since you have posted multiple question , we will do the first one for you . In order to get…
Q: The Opal Company was incorporated and began operations on January 1, 2019. Opal used the…
A: FIFO is the method of valuation of inventory in which the earliest inventory hold by the…
Q: Shondee Corporation uses the lower of cost or market and FIFO inventory methods. At the end of 2019,…
A: Income per year = (Value under FIFO Method - Value Under Cost Method) / No.of year
Q: On January 1, 2020, Bonanza Wholesalers Inc. adopted the dollar-value LIFO inventory method for…
A: a. Prepare a schedule to compute the internal conversion price indexes for 2020 and 2021. Round…
Q: Naylor, Inc. uses a perpetual inventory system. It records its inventory at lower-of-cost-or-net…
A: Lower of Cost or Net Realizable Value (NRV) Method: This is a method of recording ending inventory…
Q: In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020…
A:
Q: The following data are available for Vortex Manufacturing Pty Ltd at 30 June 2020: Inventory type…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…
Q: Pierce Ltd. (Pierce) decided to change the costing method for its inventory at its December 31,…
A: Inventories are valued as per the accounting and valuation method followed by the company. There are…
Q: During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing…
A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS Prepare the journal entry at the beginning of 2013…
Q: Southeast Steel, Inc., changed from the FIFO inventory costing method to the LIFO method during…
A: A change in an accounting principle means a change from an acceptable accounting method by a company…
Q: 3. An invoice for goods costing P 3,500 was received and recorded as a purchase on December 31 ,…
A: FOB Destination -In this terms the Buyer will get the title and risk on the records and will…
Q: Nash Company began operations in 2019 and determined its ending inventory at cost and at…
A: Journal entries are the foremost reporting of the transactions in the account books of an entity.
Q: Southeast Steel, Inc., changed from the FIFO inventory costing method to the LIFO method during…
A: Changes in accounting principle: A company switches from one accounting method to another accounting…
Q: Holder-Webb Company began operations on January 1, 2018, and uses the average-cost method of pricing…
A: Given Data:
Q: Nash Company began operations in 2019 and determined its ending inventory at cost and at…
A: Req-a Date Account Titles and Explanation Debit Credit 12/31/19 Cost of goods sold…
Q: Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for…
A: Financial statements consists of the following:- Statement of Financial position; Income Statement;…
Q: On January 1, 2018, the Haskins Company adopted the dollar-value LIFO method for its one inventory…
A:
Q: The following are the inventories for the years 2019, 2020, and 2021 for Parry Company: 1. Assume…
A: 1) The inventory will be sold at the cost of net realizable value whichever is less. The adjustment…
Q: Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for…
A:
Q: A) LC Company is deciding whether to use the LIFO or FIFO method. Based on the following data,…
A: The FIFO method of inventory valuation is a method where the stock that comes first is sold out…
Q: At December 31, 2020, the following information was available from HIBISCUS Company's accounting…
A: The retail Inventory Method is an accounting method used to ascertain the value of the Closing…
Q: iegel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…
A: Solution: The net Realizable value of each item should be calculated as follows: Product…
Q: Using the LCNRV rule, determine the proper per-unit value for balance sheet reporting purposes for…
A: Working Note: Computation of Net Realizable value:- Item selling Price Estimated selling exp.…
Q: ABC Company decides at the beginning of 2021 to adopt the FIFO method of inventory valuation. ABC…
A: What is inventory? It is the unsold produced/purchased goods at the end of the year which is having…
Q: On January 1, 2021, the Haskins Company adopted the dollar-value LIFO method for its one inventory…
A: LIFO: Under this method, merchandise purchased last were used initially for sale or production…
Q: On January 1, 2020, Temple Company adopted the dollar-value LIFO method for its one inventory pool.…
A: The question is based on the concept of Financial Accounting.
Q: Bramble Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…
A: The amount associated with the goods in inventory at the end of an accounting period is known as…
Q: During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing…
A: Part 1:
Q: In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020…
A: LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…
Q: Corrs Company began operations in 2019 and determined its ending inventory at cost and at…
A: a. Prepare the journal entries required at December 31, 2019, and December 31, 2020, under Cost…
Q: Southeast Steel, Inc., changed from the FIFO inventory costing method to the LIFO method during…
A:
Q: had used the FIFO method of inventory valuation since it began operations in 2017 CPA Co. decided to…
A: Answer - Working Note : Particulars Amount FIFO inventory- 2019 8,300,000 Weighted average…
Q: Kiko Company has the policy of valuing inventory at the lower of cost and net realizable value using…
A: Net realisable value is the replacement value of the inventory that can be received from selling the…
Q: Sandhill Company began operations in 2019 and determined its ending inventory at cost and at…
A: Here in this question, we are required to make journal entry for cost or NRV whichever is lower for…
Q: Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018.…
A: Lets understand the basics. When there is change in closing stock valuation policy from onw method…
Q: Taveras Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation.…
A:
Q: In 2021, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2020…
A: Computation of Change in Inventory Value Particular FIFO LIFO Opening Inventory $ 137,000 $…
Q: In January 2020, Susquehanna Inc. requested and secured permission from the commissioner of the…
A: Requirement a: Inventory: Inventory refers to the entire stock of goods purchased, goods…
Q: Lumen INC. is preparing its 2020 year-end financial statements. Prior to any adjustments, inventory…
A: Under FOB shipping point, title of the goods transferred to the buyer as soon as the shipment leaves…
Q: Sugarbaker Designs Inc. changed from the FIFO inventory costing method to the average cost method…
A: FIFO (first in first out) costing method is an inventory method that assumes that inventory…
Sugarbaker Designs Inc. changed from the FIFO inventory costing method to the average cost method during 2021. Which items from the 2020 financial statements should be restated on the basis of the average cost method when reported in the 2021 comparative financial statements?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2020, Koopman decided to switch to the average cost inventory method for financial reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the FIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Koopman is subject to a 21% income tax rate in all years; it pays the income taxes payable of a current year in the first quarter of the next year. Koopman had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Koopman had cash of 10,000, inventory of 24,000, other assets of 70,800, accounts payable of 4,500, and income taxes payable of 6,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in methods at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.Fava Company began operations in 2018 and used the LIFO inventory method for both financial reporting and income taxes. At the beginning of 2019, the anticipated cost trends in the industry had changed, so that it adopted the FIFO method for both financial reporting and income taxes. Fava reported revenues of 300,000 and 270,000 in 2019 and 2018, respectively. Fava reported expenses (excluding income tax expense) of 125,000 and 120,000 in 2019 and 2018, which included cost of goods sold of 55,000 and 45,000, respectively. An analysis indicates that the FIFO cost of goods sold would have been lower by 8,000 in 2018. The tax rate is 21%. Fava has a simple capital structure with 15,000 shares of common stock outstanding during 2018 and 2019. It paid no dividends in either year. Required: 1. Prepare the journal entry to reflect the change. 2. At the end of 2019, prepare the comparative income statements for 2019 and 2018. Notes to the financial statements are not necessary. 3. At the end of 2019, prepare the comparative retained earnings statements for 2019 and 2018.
- Grimstad Company uses FIFO for internal reporting purposes and LIFO for financial reporting and income tax purposes. At the end of 2019, the following information was obtained from the inventory records: Required: 1. Prepare the necessary adjusting journal entry assuming that Grimstad converts the accounts to LIFO at the end of 2019. 2. Indicate how Grimstad would disclose the inventory value on its comparative balance sheets prepared at the end of 2019. 3. Next Level By how much would Grimstads cost of goods sold differ in 2019 if it used FIFO for external reporting?Olson Company adopted the dollar-value LIFO method for inventory valuation at the beginning of 2015. The following information about the inventory at the end of each year is available from Olsons records: Required: 1. Calculate the dollar-value LIFO inventory at the end of each year. 2. Prepare the appropriate disclosures for the 2021 annual report if Olson uses current cost internally and LIFO for financial reporting.The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2019: a. Prepare the cost of merchandise sold section of the income statement for the year ended April 30, 2019, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 2019. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
- Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.Company Edgar reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 12,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?
- Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?LIFO and Inventory Pools On January 1, 2016, Grover Company changed its inventory cost flow method to the LIFO cost method from the FIFO cost method for its raw materials inventory. It made the change for both financial statement and income tax reporting purposes. Grover uses the multiple-pools approach under which it groups substantially identical raw materials into LIFO inventory pools. It uses weighted average costs in valuing annual incremental layers. The composition of the December 31, 2018, inventory for the Class F inventory pool is as follows: Inventory transactions for the Class F inventory pool during 2019 were as follows: On March 2, 2019, 4,800 units were purchased at a unit cost of 13.50 for 64,800. On September 1, 2019, 7,200 units were purchased at a unit cost of 14.00 for 100,800. A total of 15,000 units were used for production during 2019. The following transactions for the Class F inventory pool took place during 2020: On January 11, 2020, 7,500 units were purchased at a unit cost of 14.50 for 108,750. On May 14, 2020, 5,500 units were purchased at a unit cost of 15.50 for 85,250. On December 29, 2020, 7,000 units were purchased at a unit cost of 16.00 for 112,000. A total of 16,000 units were used for production during 2020. Required: 1. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2019. Show supporting computations in good form. 2. Prepare a schedule to compute the cost of Class F raw materials used in production for the year ended December 31, 2019. 3. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2020. Show supporting computations in good form.Berg Company began operations on January 1, 2019, and uses the FIFO method in costing its raw materials inventory. During 2020, management is contemplating a change to the LIFO method and is interested in determining what effect such a change will have on net income. Accordingly, the following information has been developed: Required: What is the effect on income before income taxes in 2020 of a change to the LIFO method?
