P13-18 Interim Accounting Changes LO 13-4 During the third quarter of its 20x7 fiscal year, Press Company is considering the different methods of reporting accounting changes on its interim segments. Preliminary data are available for the third quarter of 20X7, ending on September 30, 20X7, prior to any adjustments required for any accounting changes. The company's tax rate is 40 percent of income. Selected interim data for the company. In thousands of dollars follow Grass Profit Net Earning Net Sales $394 400 434 Earnings from Operations, Before Tax 5.24 33 35 Quarter Ended 20x2: March 1 June 30 September 30 (preliminary) 20x6: March 31 June 30 September 30 December 31 5114 116 132 $14.4 19,8 21.0 120 400 419 409 391 132 129 24 35 34 34 14.4 21.0 20.4 20.4 Required: For the following independent cases, present the company's interim financial data for the three quarters of 20X7 and the comparative data for 20x6, assuming that in a meeting on the last day of the third quarter of 20X7, the company decides to make the specified accounting change a. The company decides to change from the FIFO method of accounting for inventory to the LIFO method. The accounting department has prepared the following schedule of data, in thousands of dollars, showing the cost of goods sold each quarter under the LIFO method. The preceding selected interim data are based on the FIFO method. The accounting department has determined that there will be no difference in cost of goods sold prior to January 1, 20X6 (Enter your answers in thousands of dollars. Round your Net Earnings to 1 decimal place.) LIFO 5290 316 Quarter finde ZO March 31 June 30 September 30 2061 March 31 June 30 September 30 December 31 292 300 30 Required: For the following independent cases, present the company's interim financial data for the three quarters of 20x7 and the comparative data for 20x6, assuming that in a meeting on the last day of the third quarter of 20x7 the company decides to make the specified accounting change a. The company decides to change from the FIFO method of accounting for inventory to the LIFO method. The accounting department has prepared the following schedule of data, in thousands of dollars, showing the cost of goods sold each quarter under the UFO method. The preceding selected interim data are based on the FIFO method. The accounting department has determined that there will be no difference in cost of goods sold prior to January 1, 20X6. (Enter your answers in thousands of dollars. Round your Ner Earnings to 1 decimal place.) LIFO Quarter Ended 2007 March 31 June 30 September 30 2016: March 31 June 30 September 30 December 31 $290 305 316 292 300 ses 285 Quarter Ended Net Sales Gross Profit Operating Expenses Earnings from Operations, Before Tax Net Earnings s 394 4091 434 20X7 March 31 June 30 September 30 20X6 March 31 June 30 September 30 December 31 1
