Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Shown below are net income amount as they would be determined by Roberti Steel Company by each of three different inventory costing methods ($ in

Shown below are net income amount as they would be determined by Roberti Steel Company by each of three different inventory costing methods ($ in thousands).

FIFO Average Cost LIFO
Pre-2023 $2,820 $2,560 $2,300
2023 760 590 545
$3,580 $3,150 $2,845

Required:

1. Assume that Roberti Steel Company used FIFO before 2024, and then in 2024 decided to switch to average cost. Prepare the journal entry to record the change in accounting principle. (Ignore income tax effects.)

2. Assume that Roberti Steel Company used FIFO before 2024, and then in 2024 decided to switch to LIFO. Assume accounting records are inadequate to determine LIFO information prior to 2024. Therefore, the 2023 ($545) and pre-2023 ($2,300) data are not available. Prepare the journal entry to record the change in accounting principle. (Ignore income tax effects.)

3. Assume that Roberti Steel Company used FIFO before 2024, and then in 2024 decided to switch to LIFO cost. Roberti Steel Company's records of inventory purchases and sales are not available for several previous years. therefore, the pre-2023 LIFO information ($2,300) is not available. However, Roberti Steel Company does have the information needed to apply LIFO on a prospective basis beginning in 2023. Prepare the journal entry to record the change in accounting principle. (Ignore income tax effects.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bookkeeping And Accounting

Authors: Greg Shields

1st Edition

1983673536, 978-1983673535

More Books

Students also viewed these Accounting questions