Butler Products Decided in 2020 to Change Inventory Methods to More

question 103

Multiple Choice

Butler Products decided in 2020 to change inventory methods to more effectively report its results of operations. In the past, management has measured its ending inventories by the average-cost method and they now believe that FIFO is a better representation of its profitability. $$\begin{array} { c c c } \underline{\text { Year Ended } }& \underline{ \text { FIFO Inventory }} & \underline{ \text { Average-Cost Inventory} } \\\text { December 31,2018 } & \$ 250,000 & \$ 195,000 \\\text { December 31, 2019 } & 390,000 & 329,000 \\\text { December 31,2020 } & 240,000 & 190,000\end{array}$$
Ignoring income tax, which one of the following journal entries correctly records the change in the accounting principle at January 1, 2020?

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Definitions:

Queuing Situation

A scenario where entities wait in line for a service or resource, leading to analysis for efficient management of waiting times and service processes.

Arrival Behavior

The pattern or characteristics of entities (such as people, vehicles, or data packets) arriving at a service system or facility, crucial for designing service processes and managing queues.

Renege

The act of withdrawing from an agreement, commitment, or duty, often leading to a breach of contract.

Waiting-Line Models

Mathematical models used to analyze the processes involving waiting lines (or queues), aimed at improving service efficiency and minimizing waiting times.