Ramsgate Company has used the FIFO method for inventory valuation since it began business in 2014, but has elected to change to the average cost method starting in 2017. Year-end inventory valuations under each method are shown below: Required:
How, and when, would Ramsgate reflect the change in accounting principle in its financial statements (ignore income taxes)?

Question

Ramsgate Company has used the FIFO method for inventory valuation since it began business in 2014, but has elected to change to the average cost method starting in 2017. Year-end inventory valuations under each method are shown below:  Required:
How, and when, would Ramsgate reflect the change in accounting principle in its financial statements (ignore income taxes)?

Quizplus · Accepted Answer

The Answer of Ramsgate Company has used the FIFO method for inventory valuation since it began business in 2014, but has elected to change to the average cost method starting in 2017. Year-end inventory valuations under each method are shown below:  Required:
How, and when, would Ramsgate reflect the change in accounting principle in its financial statements (ignore income taxes)?

Ramsgate Company Has Used the FIFO Method for Inventory Valuation