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Category > Accounting Posted 26 May 2017 My Price 7.00

Change in inventory methods

The Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1977. In 2016, the company decided to change to the average cost method. Data for 2016 are as follows:

Additional Information:

1. The company’s effective income tax rate is 40% for all years.

2. If the company had used the average cost method prior to 2016, ending inventory for 2015 would have been $130,000.

3. 7,000 units remained in inventory at the end of 2016.

Required:

1. Prepare the journal entry at the beginning of 2016 to record the change in principle.

2. In the 2016–2014 comparative financial statements, what will be the amounts of cost of goods sold and inventory reported for 2016?

 

Answers

Alpha Geek
(8)
Status NEW Posted 26 May 2017 01:05 PM My Price 7.00

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file 1495806853-Answer.docx preview (291 words )
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