Holder-Webb Company began operations on January 1, 2005, and uses the average cost method of pricing inventory.
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(Ignore all tax effects.)
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2008.
(b) Determine net income to be reported for 2005, 2006, and 2007, after giving effect to the change in accounting principle.
(c) Assume Holder-Webb Company used the LIFO method instead of the average cost method during the years 20052007. In 2008, Holder-Webb changed to the FIFO method. Prepare the journal entry necessary to record the change inprinciple.
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Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
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