During its first year of operations and Fieri Foods used the FIFO inventory costing method for both financial reporting
and tax purposes. At the beginning of Fieri decided to change to the average method for both financial reporting and tax
purposes.
Income components before income tax for and were as follows:
Dividends of $ million were paid each year. Fieris fiscal year ends December
Required:
Prepare the journal entry at the beginning of to record the change in accounting principle. Ignore income taxes.
Prepare the comparative income statements.
& Determine the balance in retained earnings at January as Fieri reported using FIFO method and determine the
adjustment of balance in retained earnings as on January using average method instead of FIFO method.
Complete this question by entering your answers in the tabs below.
Prepare the journal entry at the beginning of to record the change in accounting principle. Ignore income taxes.
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field. Enter your answers in
millions ie should be entered as
