Here is the original schedule of cost of goods sold for Topley Company for the years of 2019 through 2022 (Click the icon to view the original schedule of cost of goods sold.) During the preparation of its 2022 financial statements, Topley Company discovered that its 2020 ending inventory was understated by $200. Make the correction to the 2020 ending inventory and all other numbers in the schedule of cost of goods sold for any years affected and answer these questions Make the correction to the 2020 ending inventory and all other numbers in the schedule of cost of goods sold for any years affected. + Beginning inventory Purchases. 2022 350 1050 all 2021 2020 750 1,100 REG 2019 650 950 1.000

Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Flay decided to change to the LIFO method. As a result of the change, net income in 2021 was $76 million. If the company had used LIFO in 2020, its cost of goods sold would have been higher by $7 million that year. Flay's records of inventory purchases and sales are not available for 2019 and several previous years. Last year, Flay reported the following net income amounts in its comparative income statements: ($ in millions) Net income 2018 2019 2020 $76 $78 $80 Required: 1. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle. (Ignore income taxes.) 3. What amounts will Flay report for net income in its 2019-2021 comparative income statements?

Keller Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of the company's merchandise was marked down in 2019 and, because there was no beginning inventory, its ending inventory for 2019 of $38,100 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2020, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2020, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Inventory, Jan. 1, 2020 Markdowns (net) Markups (net) Purchases (net) Sales (net) Cost $38,100 (b) Ending inventory LIFO retail method 130,900 Determine the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2 decimal place, e.g. 78.72% and…

At the end of 2018, the Biggie Company performed its annual physical inventory count. John Lawrence, themanager in charge of the physical count, was told that an additional $22,000 in inventory that had been sold andwas in transit to the customer should be included in the ending inventory balance. John was of the opinion that themerchandise shipped should be excluded from the ending inventory since Biggie was not in physical possessionof the merchandise.Required:Discuss the situation and indicate why John’s opinion might be incorrect.

During 2021, P Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2019 $ 120,000 understated 2020 $ 150,000 overstated *Note any error of 2019 ending inventory is carried over to 2020 as an error of the beginning inventory. P uses the periodic inventory system to ascertain year-end quantities that are converted to dollar amounts using the FIFO cost method. Prior to any adjustments for these errors and ignoring income taxes, P's retained earnings at January 1, 2021, would be: O Correct. O $30,000 overstated O $150,000 overstated. O $270,000 overstated.

In January 2020, Susquehanna Inc. requested and secured permission from the commissioner of the Internal Revenue Service to compute inventories under the last-in, first-out (LIFO) method and elected to determine inventory cost under the dollar- value LIFO method. Susquehanna Inc. satisfied the commissioner that cost could be accurately determined by use of an index number computed from a representative sample selected from the company's single inventory pool. Instructions a.    Why should inventories be included in (1) a balance sheet and (2) the computation of net income? b.    The Internal Revenue Code allows some accountable events to be considered differently for income tax reporting purposes and financial accounting purposes, while other accountable events must be reported the same for both purposes. Discuss why it might be desirable to report some accountable events differently for financial accounting purposes than for income tax reporting purposes. c.    Discuss the ways and…

Patel Bros. Grocery store recently completed their 2020 Inventory and realized that a truckload of merchandise that is valued at $18,000 was included in inventory, however this merchandise had yet to be received and was sold FOB destination. (a) What is the effect on 2020 Financial Statements including amounts (b) the effects on the 2021 financial statements including amounts; assume no errors are made in 2021.