Fifo method of inventory valuation
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Freda acquired a passive activity this year for $870,000. Gross income from operations of the activity was $160,000. Operating expenses, not including depreciation, were 122,000.
Lankston Company began the year by issuing $60,000 of common stock for cash. The company recorded revenues of $550,000, expenses of $480,000, and paid dividends of $30,000.
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Goddard Company has used the FIFO method of inventory valuation since it began operations in 2010. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2013.
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