Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the cecil-booker vending company changed its metho

The Cecil-Booker Vending Company changed its method of valuing inventory from the...

50.1K

Verified Solution

Question

Accounting

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 2024. At December 31,2023, inventories were $120,000(average cost basis) and were $124,000 a year earlier. Cecil-Bookers accountants determined that the inventories would have totaled $155,000 at December 31,2023, and $160,000 at December 31,2022, if determined on a FIFO basis. A tax rate of 25% is in effect for all years.
One hundred thousand common shares were outstanding each year. Income from continuing operations was $400,000 in 2023 and $525,000 in 2024. There were no discontinued operations either year.
Required:
Prepare the journal entry at January 1,2024, to record the change in accounting principle. (All tax effects should be reflected in the deferred tax liability account.)
Prepare the 20242023 comparative income statements beginning with income from continuing operations (adjusted for any revisions). Include per share amounts.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

The WHO recommends that mothers breastfeed for a minimum of 2 years. The American Academy of...

Biology
Q

entury is one of the factors that caused the emergence of political parties in the...

Biology
Q

A steady current T flows in a small square loop of wire of side L...

Physics
Q

Factor the following expression completely: 70p+q - 10 - 7qp

Basic Math
Q

Assume that the weight loss for the first month of a diet program varies between...

Statistics
Q

Blue Spruce Manufacturing. which produces a single product,...

Accounting
Q

Dividends Per Share Lightfoot Inc., a software development firm, has stock outstanding as follows: 25,000...

Accounting
Q

Which of the following statements is incorrect? * a. assurance services report on the quality...

Accounting
Q

A company acquired a truck for $79,000 at the beginning of the fiscal year. It...

Accounting
Q

Why are some companies, like Kmart, able to continue in business after federal indictments, while...

Accounting
Q

Brief Exercise 10.5 Recording Bonds Issued at a Discount (LO10-6) Lewis Company sold $500,000 of...

Accounting
Q

SECTION 1 Max Laboratories Inc. has been operating for over thirty years producing medications and...

Finance