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Homework answers / question archive / Blossom Company began operations in 2018 and for simplicity reasons, adopted weighted-average pricing for inventory
Blossom Company began operations in 2018 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2020, in accordance with other companies in its industry, Blossom changed its inventory pricing to FIFO. The pretax income data is reported below.
Weighted-Year Average FIFO
2018 $382.100 $398,800 2019 398,700 426,900 2020 421,100 466,900
Assume a 35% tax rate in all years.
What is Blossom's net income in 2020?
Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.
Net effect $
(c)
Show comparative income statements for Blossom Company. beginning with income before income tax, as presented on the 2020 income statement.
Income before income tax Income tax Net income
2020
$
$
2019
$
$
2018
$
$
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