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during 2022 (its first year of operations) and 2023, fieri foods used the fifo inventory costing method for both financial reporting and tax purposes. at the beginning of 2024, fieri decided to change to the average method for both financial reporting and tax purposes. income components before income tax for 2022, 2023, and 2024 were as follows: ($ in millions) 2022 2023 2024 revenues $ 540 $ 550 $ 580 cost of goods sold (fifo) (54) (56) (62) cost of goods sold (average) (84) (88) (94) operating expenses (306) (314) (318) dividends of $35 million were paid each year. fieri’s fiscal year ends december 31. required: 1. prepare the journal entry at the beginning of 2024 to record the change in accounting principle. (ignore income taxes.) 2. prepare the 2024–2023 comparative income statements. 3.

Respuesta :

Beginning in 2024, a journal entry will be made to reflect the change in accounting principle. Cost of products variance or change in 2023: A difference equals the cost of the products sold (FIFO) Cost of goods sold in 2023 (average) 2023 = $42 - $60 = $18

First In, First Out, sometimes known as FIFO, is a strategy of managing assets and valuing them that prioritises the sale, use, or disposal of assets that were produced or acquired first. The goal of FEFO is to make sure that the product with the earliest expiration date enters the market first.

The rules and regulations that businesses and other organisations must abide by when reporting financial data are known as accounting principles. The language and procedures that accountants must employ are standardised by these guidelines, making it simpler to analyse financial data.

Learn more about FIFO here:

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