AC 313

During 2016 (its first year of operations) and 2017, Batali Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2018, Batali decided to change to the average method for both financial reporting and tax purposes. points Income components before income tax for 2018, 2017 and 2016 were as follows ($ in millions): eBook Revenues Cost of goods sold (FIPO) cost of goods sold (average) Operating expenses 2018 $ 510 (55) (80) (290) 2017 $ 480 (49) (74) (286) 2016 $ 470 (47) (70) (278) Referencer Dividends of $28 million were paid each year. Batali's fiscal year ends December 31 Required: 1. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle. (Ignore income taxes.) 2. Prepare the 2018-2017 comparative income statements. 3. & 4. Determine the balance in retained earnings at January 2017 as Batali reported using FIFO method and determine the adjustment of balance in retained earnings as on January 2017 using average method instead of FIFO method, Complete this question by entering your answers in the tabs below. Rea 1 Ren 2 Ren 3 and 4 Required: 1. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle (ignore income taxes.) 2. Prepare the 2018-2017 comparative income statements. 3. & 4. Determine the balance in retained earnings at January 2017 as Batall reported using FIFO method and determine the adjustment of balance in retained earnings as on January 2017 using average method instead of FIFO method. points Complete this question by entering your answers in the tabs below. Print References Req1 Reg 2 Req 3 and 4 Prepare the journal entry at the beginning of 2018 to record the change in accounting principle. (Ignore income taxes.) (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in millions (I.e., 10,000,000 should be entered as 10).) View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 January 01, 2018 Retained earnings Inventory Reg 2 > Required: 1. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle. (Ignore income taxes.) 2. Prepare the 2018-2017 comparative Income statements. 3. & 4. Determine the balance in retained earnings at January 2017 as Batali reported using FIFO method and determine the adjustment of balance in retained earnings as on January 2017 using average method instead of FIFO method. points Complete this question by entering your answers in the tabs below. eBook Print Reg 1 Reg2 Req 3 and 4 References Prepare the 2018-2017 comparative income statements. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) COMPARATIVE INCOME STATEMENTS 2018 2017 ($ in millions) Revenues | Cost of goods sold Operating expenses Net income Dividends of $28 million were paid each year. Batali's fiscal year ends December 31. Required: 1. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle (ignore income taxes.) 2. Prepare the 2018-2017 comparative income statements. 3.& 4. Determine the balance in retained earnings at January 2017 as Batall reported using FIFO method and determine the adjustment of balance in retained earnings as on January 2017 using average method instead of FIFO method. eBook Complete this question by entering your answers in the tabs below. References Reg 1 Reg 2 Reg 3 and 4 Determine the balance in retained earnings at January 2017 as Batali reported using FIFO method and determine the adjustment of balance in retained earnings as on January 2017 using average method instead of FIFO method. (Enter your answers in millions (l.e., 10,000,000 should be entered as 10).) ($ in millions) Retained earnings balance previously reported using FIFO, Jan 1, 2017 Adjustment to balance for change in inventory methods Retained earnings balance using average method, Jan 1, 2017