Orlando Company has used the average cost method for inventory valuation since it began business in 2005, but has elected to change to the FIFO method starting in 2008. Year-end inventory valuations under each method are shown below:
Required:
What journal entry, if any, would Orlando record in 2008 for the cumulative effect of the change in accounting principle (ignore income taxes)?
Definitions:
Failed Update
An unsuccessful attempt to upgrade or update a software application or operating system, which can lead to system instability or loss of functionality.
Operational Procedure
A set of documented instructions that outline the steps to be followed in order to carry out a routine operation or task.
System Volume
A Windows term describing the storage space that holds Windows operating system files used to boot the computer.
Hard Drive Problem
Issues or malfunctions related to the hard disk drive in a computer, potentially causing data loss, slow performance, or system instability.
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