Ray Aldag, the president of Raynard Company, is pleased. Raynard substantially increased its net income in 1998

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Ray Aldag, the president of Raynard Company, is pleased. Raynard substantially increased its net income in 1998 while keeping its unit inventory relatively the same. Tom Erhardt, chief accountant, cautions Aldag, however. Erhardt says that since Raynard changed its method of inventory valuation, there is a consistency problem and it is difficult to determine whether Raynard is better off. Is Erhardt correct? Why or why not?

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Financial Accounting Tools For Business Decision Making

ISBN: 9780471169192

1st Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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