Question

Coronado Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory....

Coronado Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018–2020.

Net Income Computed Using

Average-Cost Method

FIFO Method

LIFO Method

2018

$15,980 $19,140 $12,070

2019

18,090 21,090 14,040

2020

20,130 24,990 16,940


(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Enter an account title Enter a debit amount Enter a credit amount
Enter an account title Enter a debit amount Enter a credit amount


(b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle.

Net Income

2018

$Enter a dollar amount

2019

$Enter a dollar amount

2020

$Enter a dollar amount


(c) Assume Coronado Company used the LIFO method instead of the average cost method during the years 2018–2020. In 2021, Coronado changed to the FIFO method. Prepare the journal entry necessary to record the change in principle

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Flounder Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory....
Flounder Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018–2020. Net Income Computed Using Average-Cost Method FIFO Method LIFO Method 2018 $15,900 $19,170 $12,110 2019 17,880 20,980 13,990 2020 20,180 25,060 17,120 (a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (Credit account...
Sheridan Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes....
Sheridan Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes. At January 1, 2020, the LIFO reserve has a credit balance of $1,235,600. At December 31, 2020, Sheridan’s internal reports indicated that the FIFO inventory balance was $2,723,000 and for external reporting purposes the LIFO inventory balance was $1,391,200. What is the amount of the LIFO reserve and the LIFO effect related to 2020? LIFO reserve at December 31, 2020 $enter a dollar amount...
On January 1, 2020, Coronado Company purchased 12% bonds, having a maturity value of $287,000 for...
On January 1, 2020, Coronado Company purchased 12% bonds, having a maturity value of $287,000 for $308,758.85. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Coronado Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
Grouper Enterprises Ltd.’s records reported an inventory cost of $55,900 and a net realizable value of...
Grouper Enterprises Ltd.’s records reported an inventory cost of $55,900 and a net realizable value of $52,200 at December 31, 2018. At December 31, 2019, the records indicated a cost of $71,000 and a net realizable value of $61,800. All opening inventory had been sold during the year. (a) Your answer has been saved. See score details after the due date. Assuming that Grouper Enterprises uses a perpetual inventory system, prepare the December 31, 2019 entry that is needed under...
Marigold Company began operations in 2018 and for simplicity reasons, adopted weighted-average pricing for inventory. In...
Marigold Company began operations in 2018 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2020, in accordance with other companies in its industry, Marigold changed its inventory pricing to FIFO. The pretax income data is reported below. Year Weighted-Average FIFO 2018 $378,100 $412,600 2019 401,700 434,200 2020 429,600 464,300 Show comparative income statements for Marigold Company, beginning with income before income tax, as presented on the 2020 income statement. 2020 2019 2018 Income before income tax $enter a...
The pretax financial income (or loss) figures for Skysong Company are as follows. 2017 86,000 2018...
The pretax financial income (or loss) figures for Skysong Company are as follows. 2017 86,000 2018 (41,000) 2019 (36,000) 2020 113,000 2021 98,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2017 and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All...
The pretax financial income (or loss) figures for Marin Company are as follows. 2017 72,000 2018...
The pretax financial income (or loss) figures for Marin Company are as follows. 2017 72,000 2018 (37,000 ) 2019 (32,000 ) 2020 110,000 2021 93,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2017 and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss...
The pretax financial income (or loss) figures for Larkspur Company are as follows. 2017 76,000 2018...
The pretax financial income (or loss) figures for Larkspur Company are as follows. 2017 76,000 2018 (58,000 ) 2019 (43,000 ) 2020 130,000 2021 105,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2017 and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss...
Skysong Company began operations on January 2, 2019. It employs 12 individuals who work 8-hour days...
Skysong Company began operations on January 2, 2019. It employs 12 individuals who work 8-hour days and are paid hourly. Each employee earns 11 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows. Actual Hourly Wage Rate Vacation Days Used by...
Presented below is information related to equipment owned by Waterway Company at December 31, 2020. Cost...
Presented below is information related to equipment owned by Waterway Company at December 31, 2020. Cost $10,710,000 Accumulated depreciation to date 1,190,000 Expected future net cash flows 8,330,000 Fair value 5,712,000 Waterway intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $23,800. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT