Question: Tim Mattke Company began operations in 2012 and adopted weighted-average pricing tor inventory. In 2014, in accordance with other companies in its industry, Zehms

Tim Mattke Company began operations in 2012 and adopted weighted-average pricing tor

inventory. In 2014, in accordance with other companies in its industry, Zehms

Tim Mattke Company began operations in 2012 and adopted weighted-average pricing tor inventory. In 2014, in accordance with other companies in its industry, Zehms changed its inventory pricing to FIFO. The pretax income data is reported below. Year 2012 2013 2014 Weighted- Average S370:ooo 390,000 410,000 tooo 430,000 450000 difference S65 (a) What is Mattke's net income in 2014? Assume a 35% tax rate in all years. 256,750 292 (b) Compute the cumulative effect ot the change in accounting principle trom weighted-average to FIFO inventory pricing. Also, show the journal entry in 2014 to account for this effect. S65,ooo 2,250.00 Journal Entry Inventory (+A) Det. tax (+L) S65,ooo $22,730 $42,230

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