Please do not copy from Chegg. Provide an explained answer. I need to understand the...
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Accounting
Please do not copy from Chegg. Provide an explained answer. I need to understand the journal entries.
Holder-Webb Company began operations on January 1, 2012, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2015. The following information is available for the years 2012-2014.
Year
Average cost method
FIFO method
LIFO method
2012
15,184
19,517
11,461
2013
18,249
21,295
13,205
2014
19,410
24,015
16,240
Please do not copy from Chegg. Provide an explained answer. I need to understand the journal entries.
a. Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2015.
b. Determine net income to be reported for 2012, 2013, and 2014, after giving effect to the change in accounting principle.
c. Assume Holder-Webb Company used the LIFO method instead of the average cost method during the years 2012-2014. In 2015, Holder-Webb changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.
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