Prepare the journal entry to record the change

Assignment Help Accounting Basics

Reference no: EM131845285

Question: 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 $110,000 (average cost basis) and were $114,000 a year earlier. Cecil-Booker's accountants determined that the inventories would have totaled $135,000 at December 31, 2012, and $140,000 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 $300,000 in 2012 and $425,000 in 2013. There were no extraordinary items either year.

Required: 1. Prepare the journal entry to record the change in accounting principle. (If no entry is required for a particular event, select "No journal entry required" in the first account field.)

2. Prepare the 2013-2012 comparative income statements beginning with income from continuing operations. Include per share amounts. (Round EPS answers to 2 decimal places.)

Reference no: EM131845285

Questions Cloud

Calculate the balance in account after the last payment : calculate the balance in the account after the last payment is deposited at the end of the 20th year.

Sporadic pressure from mass publicopinion : Traditionally, foreign policy elites have faced only sporadic pressure from mass publicopinion. Is the role of television and the Internet changing.

Should hill be allowed to avoid liability : Cecil Hill was in the construction trade. He did business as "C&M Builders,Inc.," although there was no such corporation. County Concrete Co.supplied.

How do passive sponsors of terrorism differ from state : How do passive sponsors of terrorism differ from state sponsors? Which groups should concern U.S. policy?

Prepare the journal entry to record the change : Prepare the journal entry to record the change in accounting principle. (If no entry is required for a particular event, select "No journal entry required".

Explain the advantages-disadvantages of conventional bonds : Explain the advantages and disadvantages of conventional bonds and sukuk in Malaysia.

Discuss some human resources issues : You are the CEO of a European auto maker group (Pick one company from this list: Volvo, Citroen, Fiat, Renault, Audi, Volkswagen) that is planning to launch.

Describing the current policy and the reasons for change : You will accomplish this by describing the current policy and the reasons for change through a presentation of relevant images with audio description

What and evolutionary trend and unique morphological feature : What are primate ancestral characteristics, evolutionary trends, and unique morphological features?

User Account

All Pages