Response to the following problem:
Flint Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2018. The following information is available for the years 2015-2017.
Net Income Computed Using Average-Cost Method FIFO Method LIFO Method
2015 $16,080 $18,980 $11,940
2016 17,980 20,800 14,020
2017 19,920 24,890 17,050
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.
(b) Determine net income to be reported for 2015, 2016, and 2017, after giving effect to the change in accounting principle.
(c) Assume Flint Company used the LIFO method instead of the average cost method during the years 2015-2017. In 2018, Flint changed to the FIFO method. Prepare the journal entry necessary to record the change in principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually.