Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory balances under the FIFO and average cost methods:
Year FIFO Average Cost
2018 $46,400 $56,800
2019 82,200 72,400
2020 88,600 82,200
Required:
1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for a transaction /event, write "No journal entry required" in the first account field.)
2. How much higher or lower would cost of goods sold be in the 2015 revised income statement?
Answers: 1
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Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. G...
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