Goddard Company has used the FIFO method of inventory valuation since it began operations in 2015....

Year	FIFO		Average Cost
2015	$	46,300	$	56,600
2016		81,900		72,300
2017		88,200		81,900

Required:
1. Ignoring income taxes, prepare the 2018 journal entry to adjust the accounts to reflect the average cost method.
2. How much higher or lower would cost of goods sold be in the 2017 revised income statement?

Required 1

Ignoring income taxes, prepare the 2018 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Record the adjustment necessary to reflect the average cost method.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1

Required 2

How much higher or lower would cost of goods sold be in the 2017 revised income statement?

Cost of goods sold for 2017 would be

lower

in the revised income statement.

Solutions

Expert Solution

ekkarill92 answered 3 months ago

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