Melas Company changed from the LIFO to the FIFO inventory costing method on January 1, Year...
Melas Company changed from the LIFO to the FIFO inventory costing method on January 1, Year 3. Inventory values at the end of each year since the inception of the company are as follows:
FIFO LIFO
Year 1 $ 195,000 $ 177,500
Year 2 390,000 355,000
Ignore income tax considerations, prepare the appropriate journal entry, dated January 1, Year 3, to report this accounting change. (If no entry is required for a transaction/event, select "No journal entry required).
Homework Answers
| Inventory | 35,000 | |
| Retained earnings | 35,000 | |
|
(to record change the accounting change) |
(195,000-177,500)*2years
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Melas Company changed from the LIFO to the FIFO inventory
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