Johnston Controls Began Operations in 2018 Using FIFO Inventory Methods

question 23

Essay

Johnston Controls began operations in 2018 using FIFO inventory methods. On January 1, 2019, management decided they should have chosen to use LIFO, as it more accurately reflects income. The beginning 2019 inventory using FIFO was $100,000. Under the LIFO method the beginning inventory would have been $120,000.
Required: Prepare the journal entry to record the change in accounting principle and discuss the required disclosures.

Identify topic sentences in paragraphs.

Recognize transitional expressions that indicate contrast or comparison.

Differentiate between comparing and contrasting within paragraphs.

Understand the influence of societal and historical contexts on cultural creations such as jazz music.

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Definitions:

Transactions Costs

Expenses incurred when buying or selling goods or services, including search, bargaining, and enforcement costs.

Legal System

The framework of rules, laws, and regulations established by a government or society to maintain order and protect persons and property.

Ownership Rights

Legal rights that confer the possession, use, and transferability of a property or asset to its owner.

Market Participants

Entities or individuals that engage in the buying, selling, or exchange of goods and services in a particular market.