Question
In 2018, Bevins Company decided to change from LIFO to FIFO due to better representation of the flow of inventory and costs. Bevins started the
In 2018, Bevins Company decided to change from LIFO to FIFO due to better representation of the flow of inventory and costs.
Bevins started the business in 2016. Bevins tax rate is 35%. The following analysis was provided by management:
Ending Inventory LIFO FIFO Net Income
12/31/2016 $375,650 $405,900 975,000
12/31/2017 $360,450 $410,750 1,350,000
12/31/2018 $365,975 $445,775 1,389,500
Required:
1) Prepare the journal entry necessary to record the change.
2) What amount of net income would Bevins report in 2016, 2017, and 2018?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing A Risk Based Approach
Authors: Karla M Johnstone-Zehms, Audrey A. Gramling, Larry E. Rittenberg
12th Edition
035772187X, 978-0357721872
