Randall Corp. began operations on January 1, 2019, and uses FIFO to cost its inventory....
90.2K
Verified Solution
Link Copied!
Question
Accounting
Randall Corp. began operations on January 1, 2019, and uses FIFO to cost its inventory. Management is contemplating a change to the average cost method and is interested in determining what effect such a change will have on pre-tax income. Accordingly, the following information has been developed:
| Ending Inventory | 2019 | 2020 | ||
| FIFO | $480,000 | $540,000 | ||
| Average cost | 400,000 | 500,000 | ||
| Pre-tax Income (calculated using FIFO) | 750,000 | 900,000 |
Based upon the above information, a change to the average cost method in 2020 would result in pre-tax income for 2020 of
a) $940,000.
b) $790,000.
c) $860,000.
d) $980,000.
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.