Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021. Fieri decided to change to the average method for both financial reporting and tax purposes. Income components before income tax for 2019, 2020, and 2021 were as follows: ($ in million) 2019 2020 2021 $ 570 $ 580 $ 610 Cost of goods sold (FIFO) (57) (65) cost of goods sold (average) (90) (94) (100) Operating expenses (318) (326) (330) Revenues (59) Dividends of $38 million were paid each year. Fieri's fiscal year ends December 31. Required: 1. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle (gnore income taxes.) 2. Prepare the 2021-2020 comparative Income statements. 3. & 4. Determine the balance in retained earnings at January 1, 2020 as Fieri reported using FIFO method and determine the adjustment of balance in retained earnings as on January 1, 2020 using average method instead of FIFO method. Req1 Reg 2 Req 3 and 4 Prepare the journal entry at the beginning of 2021 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 (.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet 1 Record the change in accounting principle. Note: Enter debits before credits General Journal Debit Credit Date January 01, 2021 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3 and 4 Prepare the 2021-2020 comparative income statements. (Enter your answers in millions (.e., 10,000,000 should be entered as 10).) COMPARATIVE INCOME STATEMENTS 2021 2020 (5 in millions)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Studies Behind The Scenes With Theory Method And Nuance

Authors: S. Michael Gaddis

1st Edition

3030100200, 978-3030100209

More Books

Students also viewed these Accounting questions