Pharoah Incorporated decided to change from the FIFO method tovalue Inventory to the weighted...

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Accounting

Pharoah Incorporated decided to change from the FIFO method tovalue Inventory to the weighted average method In July 2017. Thecumulative effect on prior years of retrospective application ofthe new Inventory costing method was determined to be $21,500 netof $7,000 tax. As prices are decreasing, cost of sales would belower and ending inventory higher for the preceding period.Retained earnings on January 1. 2017 was $243,500 . (a1) Prepare apartial statement of retained earnings illustrating the adjustedbalance af retained earnings. Statement of Retained Earnings(Partial)

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All working forms part of the answer Method has been changed from FIFO to Weighted Average and it states that prices were decreasing Hence ending inventory as per FIFO would have been at lower See Answer

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In: AccountingPharoah Incorporated decided to change from the FIFO method tovalue Inventory to the weighted average...Pharoah Incorporated decided to change from the FIFO method tovalue Inventory to the weighted average method In July 2017. Thecumulative effect on prior years of retrospective application ofthe new Inventory costing method was determined to be $21,500 netof $7,000 tax. As prices are decreasing, cost of sales would belower and ending inventory higher for the preceding period.Retained earnings on January 1. 2017 was $243,500 . (a1) Prepare apartial statement of retained earnings illustrating the adjustedbalance af retained earnings. Statement of Retained Earnings(Partial)