Below is the net income of Benchley Instrument Co., a private corporation, computed under the two inventory
Question:
Below is the net income of Benchley Instrument Co., a private corporation, computed under the two inventory methods using a periodic system.
Instructions (Ignore tax considerations.)
(a) Assume that in 2015 Benchley decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2015, and show net income reported for 2012, 2013, 2014, and 2015.
(b) Assume that in 2015 Benchley, which had been using the average-cost method since incorporation in 2012, changed to the FIFO method of pricing inventories. Prepare the journal entry necessary to record the change in 2015, and show net income reported for 2012, 2013, 2014, and 2015.
Step by Step Answer:
Intermediate Accounting IFRS Edition
ISBN: 9781118443965
2nd Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield