Martinez Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation....

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Martinez Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Martinez had used the LIFO method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Martinez concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Date January 1, 2023 Inventory Determined by LIFO Method FIFO Method Cost of Goods Sold Determined by LIFO Method FIFO Method $0 December 31, 2023 100 8 8 $0 So 790 800 December 31, 2024 200 260 900 830 December 31, 2025 320 390 1.020 1.010 Other information: 1. For each year presented, sales are $3,110 and operating expenses are $1,030. 2. Martnez provides two years of financial statements. Earnings per share information is not required. Prepare income statements reporting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2025 and 2024. Sales Cost of Goods Sold Operating Expenses v Net Income/(Loss) MARTINEZ CO. Income Statement For the Year Ended December 31 $ 2024 2025 Martinez Co. decides at the beginning of 2025 to adopt the FIFO method of inventory valuation. Martinez had used the LIFO method for financial reporting since its inception on January 1, 2023, and had maintained records adequate to apply the FIFO method retrospectively. Martinez concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold. Date January 1, 2023 Inventory Determined by LIFO Method FIFO Method Cost of Goods Sold Determined by LIFO Method FIFO Method $0 December 31, 2023 100 8 8 $0 So 790 800 December 31, 2024 200 260 900 830 December 31, 2025 320 390 1.020 1.010 Other information: 1. For each year presented, sales are $3,110 and operating expenses are $1,030. 2. Martnez provides two years of financial statements. Earnings per share information is not required. Prepare income statements reporting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2025 and 2024. Sales Cost of Goods Sold Operating Expenses v Net Income/(Loss) MARTINEZ CO. Income Statement For the Year Ended December 31 $ 2024 2025