Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ed ok Exercise 20-2 (Algo) Change in principle; change in inventory methods [LO20-2] Aquatic Equipment Corporation decided to switch from the LIFO method of

image text in transcribed

ed ok Exercise 20-2 (Algo) Change in principle; change in inventory methods [LO20-2] 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 $53,000 higher using FIFO. Retained earnings at the end of 2020 was reported as $710,000 (reflecting the LIFO method). The tax rate is 35% 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

Step: 3

blur-text-image

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

Accounting

Authors: Carl warren, James Reeve, Jonathen Duchac, Sheila Elworthy,

Volume 1, 2nd canadian Edition

176509739, 978-0176509736, 978-0176509743

More Books

Students also viewed these Accounting questions

Question

Compare social roles with gender roles. Critical T hinking

Answered: 1 week ago

Question

How flying airoplane?

Answered: 1 week ago

Question

Discuss how distance and borders reduce trade. LO.1

Answered: 1 week ago