Cougar Company changed its inventory method from the average cost method to FIFO at the start of 2 0 2 4 At December 3 1 , 2 0 2 3 , inventory had a value of $ 1 2 0 , 0 0 0 using the average cost method, and $ 1 2 4 , 0 0 0 the previous year Cougar's accountants determined that inventory would have had a balance of $ 1 5 5 , 0 0 0 at December 3 1 , 2 0 2 3 and $ 1 6 0 , 0 0 0 at December 3 1 , 2 0 2 2 , if Cougar had used FIFO that year Cougar's tax rate is 2 5 Cougar had 1 0 0 , 0 0 0 shares of common stock outstanding each year Income from continuing operations was $ 4 0 0 , 0 0 0 in 2 0 2 3 , and $ 5 2 5 , 0 0 0 in 2 0 2 4 There were no discontinued operations either year Required Prepare the journal entry at January 1 , 2 0 2 4 to record the change in accounting principle ( all tax effects should be reflected in the income tax payable amount ) 1 points Calculate Cougar's 2 0 2 3 net income to be reported in the 2 0 2 4 2 0 2 3 comparative income statements 1 points Calculate Cougar's 2 0 2 4 X net income to be reported in the 2 0 2 4 2 0 2 3 comparative income statements 1 points

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Question: Cougar Company changed its inventory method from the average cost method to FIFO at the start of 2 0 2 4 . At December 3

Cougar Company changed its inventory method from the average cost method to FIFO at the start of

2024 .

At December

31, 2023,

inventory had a value of $

120, 000

using the average cost method, and $

124, 000

the previous year. Cougar's accountants determined that inventory would have had a balance of $

155, 000

at December

31, 2023

and $

160, 000

at December

31, 2022,

if Cougar had used FIFO that year. Cougar's tax rate is

25 % .

Cougar had

100, 000

shares of common stock outstanding each year. Income from continuing operations was $

400, 000

2023,

and $

525, 000

2024 .

There were no discontinued operations either year.

Required

Prepare the journal entry at January

1, 2024

to record the change in accounting principle

(

all tax effects should be reflected in the income tax payable amount

) [1

points

]

Calculate Cougar's

2023

net income to be reported in the

2024 - 2023

comparative income statements.

[1

points

]

Calculate Cougar's

2024

X net income to be reported in the

2024 - 2023

comparative income statements.

[1

points

]

Cougar Company changed its inventory method from

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