Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The following data were available:YearPretax OperatingExcess of FIFO Ending InventoryIncome using LIFOover LIFO Ending Inventory2020$40,000$8,000201920,0007,000201830,0004,000 The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception. YearPretax OperatingExcess of FIFO Ending InventoryIncome using LIFOover LIFO Ending Inventory2020$40,000$8,000201920,0007,000201830,0004,000 The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception. c. Prepare the 2019 statement of retained earnings as it would appear in the comparative 2019-2020 financial statements. Retained Earnings InstructionsTulip CompanyStatement of Retained Earnings✔1 2 3 4 5 ✔

Name: Tulip Company decided to change from LIFO to FIFO inventory costing, e
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Description: Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The following data were available:YearPretax OperatingExcess of FIFO Ending InventoryIncome using LIFOover LIFO Ending Inventory2020$40,000$8,000201920,00

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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 5E: Fava Company began operations in 2018 and used the LIFO inventory method for both financial...

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Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The following data were available:

Year	Pretax Operating	Excess of FIFO Ending Inventory
Income using LIFO	over LIFO Ending Inventory
2020	$40,000	$8,000
2019	20,000	7,000
2018	30,000	4,000

The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception.

Year	Pretax Operating	Excess of FIFO Ending Inventory
Income using LIFO	over LIFO Ending Inventory
2020	$40,000	$8,000
2019	20,000	7,000
2018	30,000	4,000

The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception.

c. Prepare the 2019 statement of retained earnings as it would appear in the comparative 2019-2020 financial statements.

Retained Earnings Instructions

Tulip Company

Statement of Retained Earnings

✔

1
2
3
4
5		✔

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