Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2018. The following data were available: The income tax rate is 35%. The company began operations on January 1, 2016, and has paid no dividends since inception.
Required:
Answer the following questions relating to the 2017-2018 comparative financial statements.
a. What is net income for 2018?
b. What is restated net income for 2017?
c. Prepare the 2017 statement of retained earnings as it would appear in the comparative
2017-2018 financial statements.

Question

Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2018. The following data were available:  The income tax rate is 35%. The company began operations on January 1, 2016, and has paid no dividends since inception.
Required:
Answer the following questions relating to the 2017-2018 comparative financial statements. 
a. What is net income for 2018?
b. What is restated net income for 2017?
c. Prepare the 2017 statement of retained earnings as it would appear in the comparative
2017-2018 financial statements.

Quizplus · Accepted Answer

The Answer of Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2018. The following data were available:  The income tax rate is 35%. The company began operations on January 1, 2016, and has paid no dividends since inception.
Required:
Answer the following questions relating to the 2017-2018 comparative financial statements. 
a. What is net income for 2018?
b. What is restated net income for 2017?
c. Prepare the 2017 statement of retained earnings as it would appear in the comparative
2017-2018 financial statements.

Tulip Company Decided to Change from LIFO to FIFO Inventory