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Question - Whitman Company began operations on January 1, 2010, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2013. The following information is available for the years 2010-2012.
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2013.
(b) Determine net income to be reported for 2010, 2011, and 2012, after giving effect to the change in accounting principle.
(c) Assume Whitman Company used the LIFO method instead of the average cost method during the years 2010-2012. In 2013, Whitman changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.
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