Acc3302 Ch22HWword.docx - Chapter22HomeWork Exercises...

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Chapter 22 Home WorkExercises 22-3(a)TAVERAS CO.Income StatementFor the Year Ended December 31LIFO201520162017Sales$3,000$3,000$3,000Cost of goods sold..........................................................8001,0001,130Operating expenses.........................................................1,0001,0001,000Net income............................................................$1,200$1,000$870Income StatementFor the Year Ended December 31FIFO201520162017Sales$3,000$3,000$3,000Cost of goods sold..........................................................8209401,100Operating expenses.........................................................1,0001,0001,000Net income............................................................$1,180$1,060$900
Chapter 22 Home Work(b)TAVERAS CO.Income StatementFor the Year Ended December 3120172016As adjusted (Note A)Sales$3,000$3,000Cost of goods sold..........................................................1,100940Operating expenses.........................................................1,0001,000Net income............................................................$900$1,060(c)Note A:Change in Method of Accounting for Inventory ValuationOn January 1, 2017, Taveras elected to change its method of valuing its inventory to theFIFO method, whereas in all prior years inventory was valued using the LIFO method. Thenew method of accounting for inventory was adopted because it better reflects the currentcost of the inventory on the balance sheet and comparative financial statements of prioryears have been adjusted to apply the new method retrospectively. The following financial

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