Question
Question 2 Zodiac Company started operations on April 1 2013, and used the FIFO method of inventory valuation since inception. In 2018, it decided to
Question 2
Zodiac Company started operations on April 1 2013, and used the FIFO method of inventory valuation since inception. In 2018, it decided to switch to the average-cost method. The following information relates to the business:
| Net Income | Retained Earnings (ending balance) | |||
| Under FIFO | Under Average Cost | Under FIFO | ||
| 2013 | $110,000 | $100,000 | $110,000 | |
| 2014 | $70000 | $65,000 | $160,000 | |
| 2015 | $90,000 | $80,000 | $240,000 | |
| 2016 | $120000 | $130,000 | $300,000 | |
| 2017 | $200,000 | $212,000 | $580,000 | |
a) What is the beginning retained earnings balance at April 1, 2015, if Zodiac prepares comparative financial statements in 2015? (3 marks)
b) What is the beginning retained earnings balance at April 1, 2017, if Zodiac prepares comparative financial statements starting in 2015? (3 marks)
c) What is the beginning retained earnings balance as at April 1, 2018, if Zodiac prepares single period financial statements in 2018?
(3 marks)
d) What is the net income reported by Zodiac in the 2017 income statements if it prepares comparative financial statements starting with 2015?
(3 marks)
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Hardening By Auditing A Handbook For Measurably And Immediately Iimrpving The Security Management Of Any Organization
Authors: Eugene A. Razzetti
1st Edition
1665562609, 978-1665562607
