In this simulation, you are asked questions about changes in accounting policy. Prepare responses to all parts.

Journal Entries
Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2011.
Financial Statements
Assuming Garner had the accounting change described above, Garner€™s income in 2011 was $30,000. Compute basic and diluted earnings per share for Garner Company for 2011. Show how income and EPS will be reported for 2011 and2010.

s KWW Professional_Simulation Changes in Accounting Policy Time Remaining 1 hours 20 minutes Direotions Situation Journal Entries Finanolal Statements Resources Garner Company began operations on January 1, 2008, and uses the average cost method of pricing inventory Management is contemplating a change in inventory methods for 2011. The following information is available for the years 2008-2010. Net Income Computed Using Average Cost Method FIFO Method 2008 2009 2010 $15,000 18,000 20,000 $20,000 24,000 27,000 On January 1, 2010, Garner issued 10-year, $200,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 30 Garner ordinary shares. The company has had 10,000 ordinary shares outstanding throughout its life. None of the bonds have been exercised as of the end of 2011. (Ignore tax effects.)