Macintosh Inc. changed from LIFO to the FIFO inventory costing method on January 1, 2021. Inventory values at the end of each year since the Inception of the company are as follows:

FIFO LIFO
2019 $196,000 $178,000
2020 392,000 356,000

Required:
Ignoring Income tax considerations. prepare the entry to report this accounting change

You only need to adjust the ending inventory for 2020, since the ending inventory for 2019 no effect on the income statement. This happens because FIFO always uses the first units purchased to determine the cost of goods sold, and after one year, there is no real effect on net income.

The adjustment for ending inventory 2020 should be:

Dr Merchandise inventory 36,000

    Cr Cost of goods sold 36,000

This adjustment will decrease the expenses during 2020 and increase that year's net income.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.