Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

E 20-2 Change in principle; change in inventory methods Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the

image text in transcribedimage text in transcribed

E 20-2 Change in principle; change in inventory methods Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2021. The inventory as reported at the end of 2020 using LIFO would have been $60,000 higher using FIFO. Retained earnings at the end of 2020 was reported as $780,000 (reflecting the LIFO method). The tax rate is 25%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle.

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

Intermediate Accounting

Authors: David Spiceland

11th Edition

1264134525, 9781264134526

More Books

Students also viewed these Accounting questions

Question

mple 10. Determine d dx S 0 t dt.

Answered: 1 week ago

Question

what is the best meal

Answered: 1 week ago