Acct DB4thread

Acct DB4thread - March 4, 2011 Acct. 302 DB 4 Group2,...

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March 4, 2011 Acct. 302 DB 4 Group2, Module 7 Requirement 1: AMCOM has been using LIFO for valuing its inventory. The company changed to FIFO to have more accurate financial statements on the state of the company. The “realized periodic income” will be best placed with the expense from Cost of Goods Sold using the FIFO method (Spiceland, 2011). Since the company changed the “accounting principle method” for valuing inventory it will have to go back and adjust its financial statements from the previous years (Spiceland, 2011). The “Retrospective Approach” will be utilized because of the prior year adjustment (Spiceland, 2011). Under this approach the inventory will categorized under FIFO from the beginning when LILO was started. All of the prior year’s financial statements will need to be amended to reflect this change. The effects on the “tax payable and deferred tax liability [accounts will] increase (Bloom, 2009). The effects on the “inventory and retained earnings
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Acct DB4thread - March 4, 2011 Acct. 302 DB 4 Group2,...

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