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Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the...

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Accounting

Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2024. The inventory as reported at the end of 2023 using LIFO would have been $56,000 higher using FIFO. Retained earnings at the end of 2023 was reported as $740,000(reflecting the LIFO method). The tax rate is 35%.
Required:
Calculate the balance in retained earnings at the time of the change (beginning of 2024) as it would have been reported if FIFO had been used in prior years.
Prepare the journal entry at the beginning of 2024 to record the change in accounting principle.
Complete this question by entering your answers in the tabs below.
Prepare the journal entry at the beginning of 2024 to record the change in accounting principle.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Journal entry worksheet
1
Record the change in accounting principle.
Note: Enter debits before credits.
\table[[Date,General Journal,Debit,Credit],[January 01,2024,nventory,67,000,]]
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