In 2013, CPS Company changed its method of valuing inventory from the FIFO method to the average

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In 2013, CPS Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2012, CPS’s inventories were $32 million (FIFO). CPS’s records indicated that the inventories would have totaled $23.8 million at December 31, 2012, if determined on an average cost basis.

Required:
1. Prepare the journal entry to record the adjustment. (Ignore income taxes.)
2. Briefly describe other steps CPS should take to report the change.

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Related Book For  book-img-for-question

Intermediate accounting

ISBN: 978-0077647094

7th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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