{"id":132163,"date":"2023-08-20T00:29:02","date_gmt":"2023-08-20T00:29:02","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/the-cecil-booker-vending-company-changed-its-method-of-valuing\/"},"modified":"2023-08-20T00:29:02","modified_gmt":"2023-08-20T00:29:02","slug":"the-cecil-booker-vending-company-changed-its-method-of-valuing","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/the-cecil-booker-vending-company-changed-its-method-of-valuing\/","title":{"rendered":"The cecil-booker vending company changed its method of valuing"},"content":{"rendered":"<div>\n<p><strong><span>P20-1<\/span><\/strong><span> Change in inventory costing methods; comparative income statements<\/span><\/p>\n<p><span>\u00a0<\/span><\/p>\n<p><span>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 2011. At December 31, 2010, inventories were $120,000 (average cost basis) and were $124,000 a year earlier. Cecil-Booker&#8217;s accountants determined that the inventories would have totaled $155,000 at December 31, 2010, and $160,000 at December 31, 2009, if determined on a FIFO basis. A tax rate of 40% is in effect for all years.<\/span><\/p>\n<p><span>\u00a0<\/span><\/p>\n<p><span>One hundred thousand common shares were outstanding each year. Income from continuing operations was $400,000 in 2010 and $525,000 in 2011. There were no extraordinary items either year.<\/span><\/p>\n<p><span>\u00a0<\/span><\/p>\n<p><span>\u00a0<\/span><\/p>\n<p><strong><span>Required:<\/span><\/strong><\/p>\n<p><strong><span>1. <\/span><\/strong><span>Prepare the journal entry to record the change in accounting principle. (All tax effects should be reflected in the deferred tax liability account.)<\/span><\/p>\n<p><span>\u00a0<\/span><\/p>\n<p>\u00a0<\/p>\n<p><span>2. Prepare the 2011\u20132010 comparative income statements beginning with income from continuing operations. Include per share amounts.<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>P20-1 Change in inventory costing methods; comparative income statements \u00a0 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 2011. At December 31, 2010, inventories were $120,000 (average cost basis) and were $124,000 a year earlier. Cecil-Booker&#8217;s accountants determined that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-132163","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/132163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=132163"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/132163\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=132163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=132163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=132163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}