Question
In 2022, Cynthia Corporation changed its method of inventory pricing from LIFO to FIFO. Net income computed on a LIFO as compared to a FIFO
In 2022, Cynthia Corporation changed its method of inventory pricing from LIFO to FIFO. Net income computed on a LIFO as compared to a FIFO basis for the four years involved is: (Ignore income taxes.)
LIFO FIFO
2019 $78,900 $87,200
2020 84,500 88,300
2021 87,400 90,400
2022 92,600 92,600
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(a)
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Indicate the net income that would be shown on comparative financial statements issued at 12/31/22 for each of the four years, assuming that the company changed to the FIFO method in 2022.
Net Income
2019 $
87,200
2020 $
88,300
2021 $
90,400
2022 $
92,600
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(b)
Assume that the company had switched from the average cost method to the FIFO method with net income on an average cost basis for the four years as follows: 2019, $80,400; 2020, $86,120; 2021, $90,300; and 2018, $93,600. Indicate the net income that would be shown on comparative financial statements issued at 12/31/22 for each of the four years under these conditions.
Net Income
2019 $
2020 $
2021 $
2022 $
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