Blossom Inc., which uses a periodic system, changed from the weighted average cost formula to the FIFO cost formula in 2023. The increase in the prior year's income before tax as a result of this change is $229,000. The tax rate is 30%. Prepare Blossom's 2023 journal entry to record the change in accounting policy, assuming that the company's financial statements are reliable and more relevant as a result of the change. Assume that the 2023 year-end balance of inventory has not yet been recorded. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit

Blossom Inc., which uses a periodic system, changed from the weighted average cost formula to the FIFO cost formula in 2023. The increase in the prior year's income before tax as a result of this change is $229,000. The tax rate is 30%. Prepare Blossom's 2023 journal entry to record the change in accounting policy, assuming that the company's financial statements are reliable and more relevant as a result of the change. Assume that the 2023 year-end balance of inventory has not yet been recorded. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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Berg Company began operations on January 1, 2019, and uses the FIFO method in costing its raw materials inventory. During 2020, management is contemplating a change to the LIFO method and is interested in determining what effect such a change will have on net income. Accordingly, the following information has been developed: Required: What is the effect on income before income taxes in 2020 of a change to the LIFO method?
Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
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