$($Accounting Change$)$ Taveras Co$.$ decides at the beginning of $2025$ to adopt the FIFO method of inventory valuation. Taveras had used the LIFO method for financial reporting since its inception on January $1,2023,$ and had maintained records adequate to apply the FIFO method retrospectively. Taveras concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold.

$$

$$ Inventory Determined by$$ Cost of Goods Sold Determined by

Date$$ LIFO Method$$ FIFO Method$$ LIFO Method$$ FIFO Method

January $1,2023$ $ $0$ $ $0$ $ $0$ $ $0$

December $31,20239080860870$

December $31,2024180260900810$

December $31,20252903901,1101,090$

Other information:

$$

For each year presented, sales are $$3,180$ and operating expenses are $$990.$

Taveras provides two years of financial statements. Earnings per share information is not required.

Instructions

Prepare income statements under LIFO and FIFO for $2023,2024,$ and $2025.$ Bonita Co$.$ decides at the beginning of $2025$ to adopt the FIFO method of inventory valuation. Bonita had used the LIFO method for financial reporting since its inception on January $1,2023,$ and had maintained records adequate to apply the FIFO method retrospectively. Bonita concluded that FIFO is the preferable inventory method because it reports the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold.

Other information:

$1.$ For each year presented, sales are $\backslash (\backslash$$ $3,180\backslash )$ and operating expenses are $\backslash (\backslash$$ $990\backslash ).$

$2.$ Bonita provides two years of financial statements. Earnings per share information is not required. $($a$)$

Your answer is partially correct.

Prepare income statements under LIFO for $2023,2024,$ and $2025.$

BONITA CO$.$

Income Statement

For the Year Ended December $31$ Prepare income statements under FIFO for $2023,2024,$ and $2025.$

BONITA CO$.$

Income Statement

For the Year Ended December $31$