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Orlando Company Has Used the Average Cost Method for Inventory

Question 23

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Orlando Company has used the average cost method for inventory valuation since it began business in 2009, but has elected to change to the FIFO method starting in 2012. Year-end inventory valuations under each method are shown below: Orlando Company has used the average cost method for inventory valuation since it began business in 2009, but has elected to change to the FIFO method starting in 2012. Year-end inventory valuations under each method are shown below: Required: How would Orlando reflect the change in accounting principle in its financial statements (ignore income taxes)? Required:
How would Orlando reflect the change in accounting principle in its financial statements (ignore income taxes)?

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Orlando would revise prior years' financ...

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