The cecil booker vending company changed its metho

Assignment Help Accounting Basics
Reference no: EM131008571

The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2011. At December 31, 2010, inventories were $120,000 (average cost basis) and were $124,000 a year earlier. Cecil-Booker's accountants determined that the inventories would have totaled $155,000 at December 31, 2010, and $160,000 at December 31, 2009, if determined on a FIFO basis. A tax rate of 40% is in effect for all years.
One hundred thousand common shares were outstanding each year. Income from continuing operations was $400,000 in 2010 and $525,000 in 2011. There were no extraordinary items either year.

Required:

1. Prepare the journal entry to record the change in accounting principle. (All tax effects should be reflected in the deferred tax liability account.)

2. Prepare the 2011-2010 comparative income statements beginning with income from continuing operations. Include per share amounts.

Reference no: EM131008571

Questions Cloud

What is the amplitude of the given function : What is the amplitude of the function? What is the period of this function? If this graph represents a cosine function, then write an equation for the function.
Observations of commuter traffic : P-value. Have harsher penalties and ad campaigns increased seat-belt use among drivers and passengers? Observations of commuter traffic have failed to find evidence of a significant change compared with three years ago. Explain what the study's P-..
The following questions dealing with accounting : An example of an item that should be reported as a prior-period adjustment in a company's annual financial statements is : a. a settlement resulting from litigation. b. an adjustment of income taxes. c. a correction of an error that occurred in a pri..
How much did each dog weigh : At the pet fair, darlene's dog weighed 5 times as much as leah's doog. Together, the dogs weigh 84 pounds. How much did each dog weigh
The cecil booker vending company changed its metho : Prepare the 2011-2010 comparative income statements beginning with income from continuing operations. Include per share amounts.
Problem regarding the house sales : The realty company in Exercise 21b looks at a recent sample of houses that have sold. On testing the null hypothesis that 50% of the houses take more than three months to sell against the hypothesis that more than 50% of the houses take more than ..
Pyramid construction company has used the completed contract : Prepare the 2011-2010 comparative statements of shareholders' equity. (Hint: The 2009 statements reported retained earnings of $36,000. This is $60,000 - [$60,000 × 40%].
What is the value of the correlation coef?cient : Predict the volume of cerebral grey matter at age 2 to 5 years for a child whose head circumference z score at age 12 months was 1.8. Explain why it would not be a good idea to use the least-squares line to predict the volume of grey mat- ter..
Correct percentage of on-time deliveries : There's a 22% chance that the sample they drew shows the correct percentage of on-time deliveries There's a 22% chance that natural sampling variation could produce a sample with an observed proportion of on-time deliveries such as the one they obt..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Carolina company had the following information month

carolina company had the following information month budgeted sales june 68000 july 72000 august 74000 september 76000

  Trust income to beneficiary

A trust has net accounting income of $15,000. In addition, the trust has a $10,000 capital gain, which is not included in net accounting income. The trust is required to distribute the trust income to the beneficiary. The beneficiary will receive:

  The yates company purchased a piece of equipment which is

the yates company purchased a piece of equipment which is expected to have a useful life of 7 years with no salvage

  What should your company record as a gain from the sale

assume your company just sold a mainframe computer. The computer originally cost $300,000 and had accumulated depreciation of $100,000 on the date of the sale. Instead of the buyer paying cash, she gave you a $400,000 noninterest-bearing note due ..

  More company has two divisions l and m during july the

more company has two divisions l and m. during july the contribution margin in division l was 60000. the contribution

  Accounting for not-for-profit organizations

Accounting for Not-for-Profit Organizations

  Carroll company has two product lines q and p during june

carroll company has two product lines q and p. during june the companys net operating income was 25000 and the common

  Investment income-related expenses

Investment income and related expenses amount to 7,000 and 500 respectively. What is Mike and Sallys interest deduction for the 2010 tax year?

  His projections for the new facility indicate a reduction

rita arthurs the sales manager is discussing the possible outcome of the forthcoming election with paulo farmer the

  Harris corporation provided for uncollectible accounts

Harris's usual credit terms are net 30 days.

  Jastak company uses the weighted-average method in its

jastak company uses the weighted-average method in its process costing system. operating data for the painting

  How much of machine setup cost pool should be assigned

Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd