2.

Current Attempt in Progress Your answer is partially correct. Splish Inc. began operations on January 1, 2018, and uses the FIFO method of pricing inventory. Management is contemplating a change in inventory methods for 2021 The following informations available for the years 2018-2020: 2018 Net Income Computed Using Average-Cost Method FIFO Method LIFO Method $109,000 $123,000 $80,000 73,000 79.000 49,000 157.000 163.000 128,000 2019 2020 (a) Prepare the journal entry necessary to record a change from the FIFO method to the average cost method in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Inventory 26000 Retained Earnings 26000 (b) Determine net income to be reported for 2018, 2019 and 2020, after giving effect to the change in accounting principle. Net Income 2018 $ 123000 2019 79000 2020 163000 (c) Assume Splish Inc used the average cost method instead of the FIFO method during the years 2018-2020. In 2021. Splish changed to the LIFO method. Assume Splish deems the determination of the change to LIFO to be impractical. Prepare the journal entry necessary to record the change in principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Inventory 108000 Retained Earnings 108000