Question: Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2010. The increase in the prior years income before

Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2010. The increase in the prior year’s income before taxes is $1,200,000. The tax rate is 40%. Prepare Shannon’s 2010 journal entry to record the change in accounting principle.

Step by Step Solution

★★★★★

3.28 Rating (154 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Inventory 1200000 Defe... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

11-B-A-E-A (27).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

At week 24 of a project to shoot a television commercial, what should the expenditures be? If the earned value is right on schedule but the actual expenses are $9,000, what are the cost and schedule...

Robert Boey, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2008. The increase in the prior years income before taxes is $1,000,000. The tax rate is 40%. Prepare...

In 2009, Steel Technologies, Inc., changed from the LIFO to the FIFO method for its inventory costing. Steel Technologies' annual report indicated that this change had been instituted because the...

In 2011, Steel Technologies Inc. changed from the LIFO to the FIFO method for its inventory costing. Steel Technologies annual report indicated that this change had been instituted because the price...

* Holtzman Company is in the process of preparing its financial statements for 2014. Assume that no entries for depreciation have been recorded in 2014. The following information related to...

1) Define a change in estimate and provide an illustration. When is a change in accounting estimate effected by a change in accounting principle? 2) Shannon, Inc., changed from the LIFO cost flow...

Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2012. The increase in the prior years income before taxes is $1,200,000. The tax rate is 40%. Prepare...

Brief Exercise 22-3 Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2014. The increase in the prior year's income before taxes is $1,293,100. The tax...

Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2012. The increase in the prior year's income before taxes is $1,200,000. The tax rate is 40%. Prepare...

(L01) Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2017. The increase in the prior years income before taxes is $1,200,000. The tax rate is 40%....

Operation of exhaust and intake valves in an automobile engine consists of the cam C, push rod DE, rocker arm EFG which is pinned at F, and a spring and valve, V. If the spring is compressed a...

Please do the following accounting entries: (1) Receive 50,000 in exchange for common stock. (2) Borrow 10,000 from bank. (3) Purchase 2,000 of supplies inventory on credit. (4) Receive 15,000 cash...

Tax - exempt income has a greater tax advantage when compared to tax - sheltered income. true or false

Construction Forms Corporation buys securities to be available for sale when circumstances warrant, not to profit from short-term differences in price and not necessarily to hold debt securities to...

The payroll register for Proctor Company for the week ended February 14 indicated the following: Salaries .............................................. $1,500,000 Social security tax withheld...

Apeto Company produces premium chocolate candy bars. Conversion costs are added uniformly. For February, EWIP is 40 percent complete with respect to conversion costs. Materials are added at the...

Refer to the preceding facts for Parsons acquisition of Solar common stock. Parson uses the simple equity method to account for its investment in Solar. During 2013, Solar sells $40,000 worth of...

Virgin America Lands in the United States (Case #13, Notes) Overview/Objectives 1. Analyze the U.S. airline industry economic stage, its forecast, market segments, favorable conditions and challenges...

A survey of nonprofit organizations showed that online fundraising has increased in the past year. Based on a random sample of 55 nonprofits, the mean one-time gift donation in the past year was $75,...

Describe the installment-sales method of accounting.

How are operating expenses (not included in cost of goods sold) handled under the installment-sales method of accounting? What is the justification for such treatment?

Moon Hardware is planning to factor some of its receivables. The cash received will be used to pay for inventory purchases. The factor has indicated that it will require recourse on the sold...

You are evaluating Woodlawn Racetrack for a potential loan. An examination of the notes to the financial statements indicates restricted cash at year-end amounts to $100,000. Explain how you would...

Wilton, Inc. had net sales in 2012 of $1,400,000. At December 31, 2012, before adjusting entries, the balances in selected accounts were: Accounts Receivable $250,000 debit, and Allowance for...

You'd like to purchase a new car after you graduate and start working. The car that you would really like costs $34,500. You are currently earning a rate of 4.92% in an investment account. If you...