Calculate the balance in retained earnings at the time

Assignment Help Financial Accounting

Reference no: EM13124072

Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2011. The inventory as reported at the end of 2010 using LIFO would have been $60,000 higher using FIFO. Retained earnings at the end of 2010 was reported as $780,000 (reflecting the LIFO method). The tax rate is 40%.

Required:

1. Calculate the balance in retained earnings at the time of the change (beginning of 2011) as it would have been reported if FIFO had been used in prior years.

2. Prepare the journal entry at the beginning of 2011 to record the change in accounting principle.

Reference no: EM13124072

Questions Cloud

Carrying value of the bonds payable : The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be.

Find situations to represent a right-left or two-tailed test : Determine whether the following situations represent a right, left or two-tailed test: In 1997, 43% of Americans 18 years or older participated in some form of charity work.

System of simultaneous equations : State whether it is inconsistent or has infinitely many solutions. If the system has infinitely many solutions, write the solution set with y arbitrary.

Write a cover letter to inquirey : write a cover letter to inquire a possible summer intership in this very important club

Calculate the balance in retained earnings at the time : Calculate the balance in retained earnings at the time of the change (beginning of 2011) as it would have been reported if FIFO had been used in prior years.

Type of test to provide the null and alternate hypothesis : What type of test is described below and can you provide the null and alternate hypothesis? Using an old manufacturing process.

Computer-assisted audit technique : What are the advantages and disadvantages of the computer-assisted audit technique known as parallel simulation?

Statement in symbolic form : Write the statement in symbolic form (Let p: The tent is pitched. q: The bonfire is burning. #40, The bonfire is not burning, however the tent is pitched.

What is the molar concentration of the ammonia : If 17.2 mL of 0.800 M HCl solution are needed to neutralize 5.00 mL of a household ammonia solution, what is the molar concentration of the ammonia.

User Account

All Pages