Avery Instrument Corp., a small company that follows ASPE, began operations on January 1, 2008, and uses a periodic inventory system. The following net income amounts were calculated for Avery under three different inventory methods:

Instructions
Answer the following, ignoring tax considerations.
(a) Assume that in 2011 Avery changed from the average cost method to the FIFO method of costing inventories and it was agreed that the FIFO method provided more relevant financial statement information. Prepare the necessary journal entry for the change that took place during 2011, and provide all the information that is needed for reporting on a comparative basis.
(b) Assume that in 2011 Avery, which had been using the LIFO method since incorporation in 2008, changed to the FIFO method of costing inventories in order to comply with CICA Handbook, Part II, Section 3031, since LIFO is no longer a permitted inventory cost flow assumption under GAAP. The company applies the new policy retrospectively in accordance with the transitional provisions of the Handbook section. Prepare the necessary journal entry for the change, and provide all the information that is needed for reporting on a comparative basis.

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2008 2009 2010 2011 FIFO $26,000 30,000 28,000 34,000 Average Cost $24,000 25,000 27,000 30,000 LIFO $20,000 21,000 24,000 26,000