Pace Instrument Corp., a small company that folem ASPE, began operations on January 1, 2014, and...

  

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Pace Instrument Corp., a small company that folem ASPE, began operations on January 1, 2014, and uses a periodic inventory system. The following net income amouns were calculated for Pace under three different inventory cost formulas: Weighted Average Cost LIFO FIFO 2014 2015 2016 $26,000 30,000 28,000 34,000 $24.000 25,000 27,000 30,000 $20,000 21,000 24,000 26,000 2017 Instructions Answer the folowing, ignoring income tax considerations. (a) Assume that in 2017, Pace changed from the weighted average cost formula to the FIFO cost formula and it agreed that the FIFO method provided more relevant financial statement information. Prepare the necessary p nal entry for the change that took place during 2017, and provide all the information that is needed for reporting on a comparative basis. (b) Assume that in 2017, Pace, which had been using the LIFO method since incorporation in 2014, changed to the FIFO cost formula in order to comply with CPA Canada Handbook, Part II, Section 3031, because LIFO is nut a permitted inventory cost flow assumption under GAAP. The company applies the new policy retrospectivels Prepare the necessary journal entry for the change, and provide all the information that is needed for reporting cn a comparative basis. Pace Instrument Corp., a small company that folem ASPE, began operations on January 1, 2014, and uses a periodic inventory system. The following net income amouns were calculated for Pace under three different inventory cost formulas: Weighted Average Cost LIFO FIFO 2014 2015 2016 $26,000 30,000 28,000 34,000 $24.000 25,000 27,000 30,000 $20,000 21,000 24,000 26,000 2017 Instructions Answer the folowing, ignoring income tax considerations. (a) Assume that in 2017, Pace changed from the weighted average cost formula to the FIFO cost formula and it agreed that the FIFO method provided more relevant financial statement information. Prepare the necessary p nal entry for the change that took place during 2017, and provide all the information that is needed for reporting on a comparative basis. (b) Assume that in 2017, Pace, which had been using the LIFO method since incorporation in 2014, changed to the FIFO cost formula in order to comply with CPA Canada Handbook, Part II, Section 3031, because LIFO is nut a permitted inventory cost flow assumption under GAAP. The company applies the new policy retrospectivels Prepare the necessary journal entry for the change, and provide all the information that is needed for reporting cn a comparative basis.

Answer rating: 100% (QA)

ANSWER a Inventory 11750 Retained Earnings 11750 2017 258027390 24810 2018 784030390 22550 2019 133028580 27250 11750 Cost of Goods Sold could be used ... View the full answer