Average cost method to the FIFO cost method

Assignment Help Financial Accounting

Reference no: EM13751772

The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2013. At December 31, 2012, inventories were $112,000 (average cost basis) and were $116,000 a year earlier. Cecil-Booker’s accountants determined that the inventories would have totaled $139,000 at December 31, 2012, and $144,000 at December 31, 2011, if determined on a FIFO basis. A tax rate of 40% is in effect for all years. One hundred thousand common shares were outstanding each year. Income from continuing operations was $320,000 in 2012 and $445,000 in 2013. There were no extraordinary items either year. Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Prepare the 2013–2012 comparative income statements beginning with income from continuing operations. Include per share amounts

Reference no: EM13751772

Questions Cloud

Determine the gross income of the beneficiaries : Determine the gross income of the beneficiaries in the following cases: Justin's employer was downsizing and offered employees an amount equal to one year's salary if the employee would voluntarily retire.

COSO principle dealing with monitoring activities : Which of the following is a COSO principle dealing with monitoring activities: Which of the following is not true about corporate governance. Which of the following is true about ERM

Estimating impact-assessing the likelihood of a risk event : Which of the following would not be part of a corporate risk assessment audit. Analysis of risk is limited to estimating the impact and assessing the likelihood of a risk event.

Determine the compensation expense for the stock option plan : On October 15, 2012, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2013, 23 million stock options were granted, exercisable for 23 million shares of Ensor's $1 par common stock. D..

Average cost method to the FIFO cost method : The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2013. At December 31, 2012, inventories were $112,000 (average cost basis) and were $116,000 a year earl..

About internal-external auditing : Which of the following is true about internal vs. external auditing?

Internal auditing have when it comes to third-party risks : What role does internal auditing have when it comes to third-party risks

Internal auditor assigned to an audit engagement : According to the IPPF, an internal auditor assigned to an audit engagement:

Write a paper on e-portfolio and reflection on contemporary : Write a paper on E-portfolio and reflection on contemporary Australian society. The related topics are: Australia: Culture, history and politics. Globalising the Australian economy and The Australian envirnoment.

User Account

All Pages