Tim Mattke Company began operations in 2023 and for simplicity reasons, adopted weighted-average pricing for inventory. In

Question:

Tim Mattke Company began operations in 2023 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2025, in accordance with other companies in its industry, Mattke changed its inventory pricing to FIFO. The pretax income data is reported below.image


Instructions


a. What is Mattke’s net income in 2025? Assume a 20% tax rate in all years.


b. Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.


c. Show comparative income statements for Tim Mattke Company, beginning with income before income tax, as presented on the 2025 income statement.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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