Exercise 22-4 Gordon Company started operations on January 1, 2009, and has used the FIFO method...

Exercise 22-4 Gordon Company started operations on January 1, 2009, and has used the FIFO method of inventory valuation since its inception. In 2014, it decides to switch to the average cost method. You are provided with the following information. Net Income Retained Earnings (Ending Balance) Under FIFO Under Average-Cost Under FIFO 2009 $101,380 $91,360 $100,850 2010 70,770 65,890 160,050 2011 90,890 79,190 235,400 2012 119,070 130,320 340,300 2013 300,770 293,810 590,820 2014 305,340 310,740 779,100 (a) What is the beginning retained earnings balance at January 1, 2011, if Gordon prepares comparative financial statements starting in 2011? Retained earnings, January 1 $ (b) What is the beginning retained earnings balance at January 1, 2014, if Gordon prepares comparative financial statements starting in 2014? Retained earnings, January 1 $ (c) What is the beginning retained earnings balance at January 1, 2015, if Gordon prepares single-period financial statements for 2015? Retained earnings, January 1 $ (d) What is the net income reported by Gordon in the 2014 income statement if it prepares comparative financial statements starting with 2012? 2012 2013 2014 Net Income

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Oriole Company started operations on January 1, 2012, and has used the FIFO method of inventory...

Oriole Company started operations on January 1, 2012, and has used the FIFO method of inventory valuation since its inception. In 2018, it decides to switch to the average-cost method. You are provided with the following information. Net Income Retained Earnings (Ending Balance) Under FIFO Under Average-Cost Under FIFO 2012 $92,000 $82,800 $90,600 2013 68,300 62,900 158,500 2014 81,300 70,800 255,000 2015 116,500 126,800 308,600 2016 301,400 290,400 644,800 2017 311,300 316,800 731,300 (a) What is the beginning retained earnings...

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

Goddard Company has used the FIFO method of inventory valuation since it began operations in 2015. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2018. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2015 $ 47,000 $ 58,000 2016 84,000 73,000 2017 91,000 84,000 Required: 1. Ignoring income taxes, prepare the 2018 journal entry to adjust the accounts to reflect the...

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

Goddard Company has used the FIFO method of inventory valuation since it began operations in 2015. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2018. The following schedule shows year-end inventory balances under the FIFO and average cost methods: 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...

Ventura Corporation purchased machinery on January 1, 2009 for $630,000. The company used the sum-of-the-years’-digits method...

Ventura Corporation purchased machinery on January 1, 2009 for $630,000. The company used the sum-of-the-years’-digits method and no salvage value to depreciate the asset for the first two years of its estimated six-year life. On January 1, 2011, Ventura changed to the straight-line depreciation method for this asset. The amount that Ventura should report for depreciation expense on its 2011 income statement is A. $120,000 B. None of the above C. $105,000 D.$75,000

10)Gordon Company purchased an asset on January 1, 2016 for $25,000. At that time, Gordon Company...

10)Gordon Company purchased an asset on January 1, 2016 for $25,000. At that time, Gordon Company estimated the residual value would be $1,000 at the end of the asset's projected ten-year life. It is now January 1, 2020; Gordon Company now estimates the asset will have a residual value of $1,500, and has a remaining useful life of four years (will last until the end of 2023). Assuming Gordon Company uses the straight-line method, what will be the depreciation expense...

Keystone Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the...

Keystone Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the following transactions: Issued common stock for $40,000. Paid $10,000 cash to purchase raw materials used to make products. Transferred $9,000 of raw materials to the production department. Paid $12,000 cash for labor used to make products. Paid $18,000 cash for overhead costs (assume actual and estimated overhead are the same). Finished work on products that cost $35,000 to make. Sold products that cost $31,500...

Keystone Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the...

Stuart Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged...

Stuart Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions. Issued common stock for $84,000. Paid $29,000 cash to purchase raw materials used to make products. Transferred $21,000 of raw materials to the production department. Paid $31,500 cash for labor used to make products. Paid $51,000 cash for overhead costs (assume actual and estimated overhead are the same). Finished work on products that cost $79,000 to make. Sold products that...

A company that uses a FIFO inventory system and began operations in Year 1 has the...

A company that uses a FIFO inventory system and began operations in Year 1 has the following information. Year 1 Year 2 Sales units 8,000 10,000 Selling price $45 $46 Production units 12,000 8,000 Unit direct material cost $2.00 $2.00 Unit direct labor cost $1.00 $1.00 Unit commission cost $.50 $.50 Annual Fixed Overhead $180,000 $180,000 Annual Fixed S,G,&A $140,000 $150,000 1. What are the inventoriable cost per unit in years 1 and 2? Absorption Costing Variable Costing 2. What...

The Jamieson Corporation used a periodic inventory system and has used the FIFO method since the...

The Jamieson Corporation used a periodic inventory system and has used the FIFO method since the company’s inception. In 20x5, the company decided to switch to the average cost method. Data for 20x5 is as follows: Beginning inventory, FIFO (5,000 units @ $30.00) $150,000 Purchases 5,000 units @ $36.00 = $180,000 5,000 units @ 40.00 = 200,000 Total 380,000 Cost of goods available for sale $530,000 Sales for 20x5 (8,000 units @ $70.00) $560,000 Additional information – 1. The company’s...

Subjects