Tamarisk, Inc. began operations on January 1, 2015, and uses the average cost method of pricing inventory. Management is considering changing inventory methods for 2018. The following information is available for the years 20152017.

		Net Income Computed Using
		Average Cost		FIFO		LIFO
2015		$72,200		$75,500		$68,000
2016		104,200		108,400		99,100
2017		114,050		116,800		111,300

(a)

• Your Answer
• Correct Answer

Partially correct answer icon

Your answer is partially correct.

Prepare the journal entry necessary to record a change from the average-cost method to the FIFO method in 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

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Solution

List of Accounts

Attempts: 3 of 3 used

(b)

Correct answer icon

Your answer is correct.

Determine net income to be reported for 2015, 2016, and 2017, after giving effect to the change in accounting principle.

		Net Income (FIFO)
2015		$enter a dollar amount
2016		$enter a dollar amount
2017		$enter a dollar amount

eTextbook and Media

List of Accounts

Attempts: 1 of 3 used

(c)

Partially correct answer icon

Your answer is partially correct.

Assume Tamarisk Inc. used the LIFO method instead of the average-cost method during the years 2015 2017. In 2018, Tamarisk changed to the FIFO method. Prepare the journal entry necessary to record the change in principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount