Below is the net income of Jonesey Laboratories computed under the three inventory methods.

Instructions
(Ignore tax considerations.)
(a) Assume that in 2015 Jonesey decided to change from the average-cost method to the FIFO method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2015 and show net income reported for 2013, 2014, and 2015.
(b) Assume that in 2015 Jonesey, which had been using the LIFO method since incorporation in 2012, changed to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change in 2015 and show net income reported for 2013, 2014, and2015.

Transcribed Image Text:

2012 2013 2014 2015 FIFO $75,000 55,000 58,000 60,000 Average-Cost $50,000 50,000 50,000 50,000 LFO $30,000 38,000 42,000 40,000