Change in Accounting Principles

Respond to the following. Submit journal entries in a table in MS
Word and written segments in the same Word document. Do not submit two
separate documents, as only one document can be accepted. For written
answers, please make sure your responses are well written, formatted per APA and have proper citations, if applicable.

Garner 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	$15,000	$20,000	$12,000
2016	18,000	24,000	14,000
2017	20,000	27,000	17,000

On January 1, 2017, Garner issued 10-year,
$200,000 face value, 6% bonds, at par. Each $1,000 bond is convertible
into 30 shares of Garner common stock. The company has had 10,000 common
shares outstanding throughout its life. None of the bonds have been
exercised as of the end of 2018. (Ignore tax effects.)

Use the link included at the bottom of this page to download the
Excel Template containing the spreadsheet you will need for this
exercise.

Using the spreadsheet Journal Entries, prepare the journal entry
necessary to record a change from the average cost method to the FIFO
method in 2018.
Assume Garner Company used
the LIFO method instead of the average cost method during the years
2015–2017. In 2018, Garner changed to the FIFO method. Using the
spreadsheet Journal Entries, prepare the journal entry necessary to
record the change in accounting principle.
Assume Garner had the
accounting change described in (2); Garner’s income in 2018 was $30,000.
Compute basic and diluted earnings per share for Garner Company for
2018. Show how income and EPS will be reported for 2018 and 2017.