Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception...
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Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data for 2024 are as follows: Beginning inventory, FIFO (6,000 units @ $30) Purchases: 6,000 units @ $36 6,000 units @ $40 Cost of goods available for sale Sales for 2024 (10,000 units @ $78) Additional Information: $ 180,000 $ 216,000 240,000 456,000 $ 636,000 $780,000 a. The company's effective income tax rate is 25% for all years. b. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $156,000. c. 8,000 units remained in inventory at the end of 2024. Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. What is the effect of the change in methods on 2024 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 Record adjustment to reflect average cost method. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data for 2024 are as follows: 6,000 units @ $36 Beginning inventory, FIFO (6,000 units @ $30) Purchases: $ 180,000 $ 216,000 240,000 456,000 $ 636,000 6,000 units @ $40 Cost of goods available for sale Sales for 2024 (10,000 units @ $78) Additional Information: a. The company's effective income tax rate is 25% for all years. $ 780,000 b. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $156,000. c. 8,000 units remained in inventory at the end of 2024. Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. What is the effect of the change in methods on 2024 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the effect of the change in methods on 2024 net income? The effect of the change for the year 2024 is a sold resulting in a in income after tax. in cost of goods in income before taxes and a(n) Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data for 2024 are as follows: Beginning inventory, FIFO (6,000 units @ $30) Purchases: 6,000 units @ $36 6,000 units @ $40 Cost of goods available for sale Sales for 2024 (10,000 units @ $78) Additional Information: $ 180,000 $ 216,000 240,000 456,000 $ 636,000 $780,000 a. The company's effective income tax rate is 25% for all years. b. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $156,000. c. 8,000 units remained in inventory at the end of 2024. Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. What is the effect of the change in methods on 2024 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 Record adjustment to reflect average cost method. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data for 2024 are as follows: 6,000 units @ $36 Beginning inventory, FIFO (6,000 units @ $30) Purchases: $ 180,000 $ 216,000 240,000 456,000 $ 636,000 6,000 units @ $40 Cost of goods available for sale Sales for 2024 (10,000 units @ $78) Additional Information: a. The company's effective income tax rate is 25% for all years. $ 780,000 b. If the company had used the average cost method prior to 2024, ending inventory for 2023 would have been $156,000. c. 8,000 units remained in inventory at the end of 2024. Required: 1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method. 2. What is the effect of the change in methods on 2024 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the effect of the change in methods on 2024 net income? The effect of the change for the year 2024 is a sold resulting in a in income after tax. in cost of goods in income before taxes and a(n)
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To adjust the accounts to reflect the average cost method for 2024 the journal entry would be as fol... View the full answer
Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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