Question: 2 0 2 4 , the company decided to switch to the average cost method. Data for 2 0 2 4 are as follows: Beginning

2024, the company decided to switch to the average cost method. Data for 2024 are as follows: Beginning inventory, FIFO (5,000 units @ $30)$ 150,000Purchases:5,000 units @ $36$ 180,0005,000 units @ $40200,000380,000Cost of goods available for sale$ 530,000Sales for 2024(8,000 units @ $70)$ 560,000 Additional Information: The company's effective income tax rate is 25% for all years. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $130,000.7,000 units remained in inventory at the end of 2024. Required: Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. What is the effect of the change in methods on 2024 net income?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

The Jamieson Corporation used a periodic inventory system and has used the FIFO method since the companys inception. In 20x5, the company decided to switch to the average cost method. Data for 20x5...

Q:

Rockwell Corporation uses a periodic inventory system and has used the FIFO cost 1 . method since inception of the company in 1 9 7 9 . In 2 0 2 4 , the company decided to switch to the average cost...

Q:

please show methodology Rockwell Corporation uses a periodic inventory system and has used the FIFO cost methcx3 since inception of the cornpany in 1979. In 2024, the company decided to switch to the...

Q:

JenCo decided to switch from the average cost method of costing inventories to the FIFO method at the beginning of 2015. The inventory as reported at the end of 2014 using average cost would have...

Q:

BKAR 3033 FINANCIAL ACCOUNTING AND REPORTING 3 MINICASE 4: MFRS 108 & MFRS 110 DUE DATE: 28/12/2020 QUESTION 1 A. MTy Bhd operates a fast food restaurant in Changlun, Kedah since year 2015. The...

Q:

Required: 1. What inventory methods does Fred's use to value its inventory? 2. Which price index does the company use in applying the retail inventory method? 3. A company that uses LIFO is allowed...

Q:

for question 21 there is a chart that goes with it and i have posted in an the attached file Question 18 (15 points) Selected financial information about income statement accounts for the Snowman...

Q:

At the beginning of 2012, Lion Company decided to change from the average cost inventory cost flow assumption to the FIFO cost flow assumption for financial reporting purposes. The following data are...

Q:

Fred's Inc operates general merchandise retail discount stores and full-service pharmacies in the Southeastern United States. Access the company's 10-K for the fiscal year ended January 28, 2017 You...

Q:

God dard Company has used the FIFO method of inventory valuation since it began operations in 2015. Goddard decided to change to the average cost method for det balances under the FIFO and average...

Q:

Show that for an integer n > 2, the period of the decimal expression for the rational number is at most n - 1. Find the first few values of n for which the period of - is equal ton- 1. Do you notice...

Q:

Suppose that E and F are two events and that Upper P left parenthesis Upper E and Upper F right parenthesisP(E and F)equals=0.30.3 and Upper P left parenthesis Upper E right...

Q:

The one-dimensional array BabyName[] contains the names of the babies in a nursery. Another one-dimensional array ParentPhone[] contains the phone numbers for the parents of the baby. A final...

Q:

Can you elucidate the role of molecular chaperones and protein quality control systems in maintaining the integrity and homeostasis of the cytoplasm, particularly under conditions of cellular stress...