Gordon Company started operations on January 1, 2009, and has used the FIFO meth

Question

Gordon Company started operations on January 1, 2009, and has used the FIFO method of inventory valuation since its inception. In 2014, it decides to switch to the average cost method. You are provided with the following information.

FIFO / AC / ERE

2009 100,890 / 91,460 / 101,620

2010 69,200 / 64,260 / 160,810

2011 89,330 / 80,690 / 235,110

2012 120,050 / 130,770 / 339,510

2013 300,120 / 292,310 / 589,880

2014 305,700 / 310,980 / 779,820

What is the net income reported by Gordon in the 2014 income statement if it prepares comparative financial statements starting with 2012

2012 ?

2013 ?

2014 ?

Please explain how to get answer

Explanation / Answer

Answer:

2012=$130,770

2013=$292,310

2014=$310,980

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