FIFO: It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period. The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

Question

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Answer 1

Question

Chapter 21, Problem 21.1P

a.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

b.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

To prepare: The journal entry to record the changes in accounting for inventory valuation.

c.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.

d.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

e.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

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Answer 2

Question

Chapter 21, Problem 21.1P

a.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

b.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

To prepare: The journal entry to record the changes in accounting for inventory valuation.

c.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.

d.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

e.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

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Answer 3

Question

Chapter 21, Problem 21.1P

a.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

b.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

To prepare: The journal entry to record the changes in accounting for inventory valuation.

c.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.

d.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

e.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

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Answer 4

Question

Chapter 21, Problem 21.1P

a.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

b.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

To prepare: The journal entry to record the changes in accounting for inventory valuation.

c.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.

d.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

e.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

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Answer 5

Chapter 21, Problem 21.1P

a.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

b.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

To prepare: The journal entry to record the changes in accounting for inventory valuation.

c.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.

d.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

e.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

Answer 6

Chapter 21, Problem 21.1P

a.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

Answer 7

Chapter 21, Problem 21.1P

a.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

The cumulative effect net of tax for the 3 years needed to record a change from FIFO to average cost method.

Answer 8

b.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

To prepare: The journal entry to record the changes in accounting for inventory valuation.

Answer 9

b.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accept that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

To prepare: The journal entry to record the changes in accounting for inventory valuation.

Answer 10

c.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.

Answer 11

c.

To determine

FIFO:

It stands for first in first out. It is an inventory valuation method in which the firm accepts that the first goods bought are also the first good sold. This method calculates the value of closing inventory at the end of an accounting period.

Where STP should report the net of tax cumulative effect, assuming that the first balance sheet presented is for the year ended 31 December 2023.

Answer 12

d.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

Answer 13

d.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

Answer 14

e.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

Answer 15

e.

To determine

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

Answer 16

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Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 21 - Are accounting changes permitted in financial...Ch. 21 - How do firms report accounting changes under the...Ch. 21 - Prob. 21.3Q Ch. 21 - How do firms account for changes in accounting...Ch. 21 - Prob. 21.5Q Ch. 21 - Prob. 21.6Q Ch. 21 - Prob. 21.7Q Ch. 21 - Prob. 21.8Q Ch. 21 - Do accounting errors that self-correct within two...Ch. 21 - Does a firm need to correct an error that...

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024.

Indicate the COGS reported on the income statement for 2021, 2022, 2023, and 2024 assuming that changes in principle are considered to be impractical.

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Chapter 21 Solutions