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Massi pharmacies, Inc. started operations on January 12X11. The company used the average cost method t=0 value inventory. Effective January 1 2X15, Massi elected to
Massi pharmacies, Inc. started operations on January 12X11. The company used the average cost method t=0 value inventory. Effective January 1 2X15, Massi elected to change its inventory method to the FIFO basis for reporting purposes. The following information is available for net income for average cost and for FIFO, Net Income Net Income After Tax Year ended After Tax Cumulative Effect Using Average cost Using FIFO Difference December 31, 2x11 $235,000 $310,000 $75,000 $75,000 December 31, 2X12 $300,000 $376,000 $76,000 $151,000 December 31, 2X13 $310,000 $400,500 $90,500 $241,000 December 31, 2X14 $425,000 $535,000 $109,500 $351,000 December 31, 2X15 $500,000 $585,000 $85,000
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