Eckert Company Reported the Following Summarized Annual Data at the End

question 51

Essay

Eckert Company reported the following summarized annual data at the end of 2014: The income tax rate is 30%. The controller of the company is considering a switch from FIFO to average-cost. He has determined that on an average-cost basis, the ending inventory would have been $220,000.
Instructions
(a) Restate the summary information on an average-cost basis.
(b) What effect, if any, would the proposed change have on Eckert's income tax expense, net income, and cash flows?
(c) If you were an owner of this business, what would your reaction be to this proposed change?

---

Definitions:

Psychologist

A professional who studies mental processes and behavior in humans and animals.

Woman

A woman is an adult human female. In terms of biology, women are distinguished by their reproductive anatomy, although the concept of womanhood can encompass wider social and gender identity aspects.

Structuralism

Structuralism is an approach in academic disciplines that explores the interconnectedness of systems within human cultures and societies.

Introspection

The practice of looking into one's own mental and emotional well-being.