Barden Inc operates a retail chain that specializes in baby

Barden Inc operates a retail chain that specializes in baby

Barden, Inc., operates a retail chain that specializes in baby clothes and accessories that are
made to its specifications by a number of overseas manufacturers. Barden began operations in
2008 and has always employed the FIFO method to value its inventory. Since 2008, prices have
generally declined as a result of intense competition among Barden's suppliers. In 2016,
however, prices began to rise significantly as these suppliers succumbed to international
pressure and addressed sweatshop conditions in their factories. The improved working
conditions and benefits led to increased costs that are being passed on to Barden. In turn,
Barden's management believes that FIFO no longer is the best method to value its inventories
and thus switched to LIFO on January 1, 2017. This accounting change was justified because of
LIFO's better matching of current costs with current revenues. Barden judges it impractical to
apply the LIFO method on a retrospective basis because the company never maintained
records on a LIFO basis. As a result of this change, ending 2017 inventory was reported at
$275,000 instead of its $345,000 FIFO value. Barden reported 2017 net income of $825,000;
the company's income tax rate is 35%. Barden has 10,000 shares of stock outstanding.
Required:
1. How should Barden's 2017 comparative financial statements reflect this change in accounting
principle?
2. Prepare whatever disclosure is required under current GAAP as a result of this change.

Barden Inc operates a retail chain that specializes in baby

SOLUTION-- http://solutiondone.online/downloads/barden-inc-operates-a-retail-chain-that-
specializes-in-baby/

Unlock answers here solutiondone.online