Current Attempt in Progress

Monty Company began operations on January $1,2018,$ and uses the average$-$cost method of pricing inventory. Management is

contemplating a change in inventory methods for $2021.$ The following information is available for the years $2018-2020.$

$($a$)$ Prepare the journal entry necessary to record a change from the average cost method to the FIFO 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 $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit

$($b$)$ Determine net income to be reported for $2018,2019,$ and $2020,$ after giving effect to the change in accounting principle.

$($c$)$ Assume Monty Company used the LIFO method instead of the average cost method during the years $2018-2020.$ In $2021,$ Monty

changed to the FIFO method. 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"

O for the amounts.$)$

Account Titles and Explanation

Debit

Credit

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List of Accounts