Question
During 2020, Williamson Company changed from FIFO to weighted-average inventory pricing. Pretax income in 2019 and 2018 (Williamson's first year of operations) under FIFO was
During 2020, Williamson Company changed from FIFO to weighted-average inventory pricing. Pretax income in 2019 and 2018 (Williamson's first year of operations) under FIFO was $160,000and $180,000, respectively. Pretax income using weighted-average pricing in the prior years would have been $145,000in 2019 and $170,000in 2018. In 2020, Williamson reported pretax income (using weighted-average pricing) of $180,000. Show comparative income statements for Williamson, beginning with "Income before income tax," as presented on the 2020 income statement. (The tax rate in all years is30%.)
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