On December 31, 20x2, Grayson Inc. changed its inventory valuation method to FIFO from weighted-average. The change will result in an $800,000 increase in the beginning inventory at January 1, 20x2. Assume a 30% income tax rate. The cumulative effect of this accounting change on prior periods that will be reported as an adjustment to the beginning balance of retained earnings is O $560,000 O $800,000 O $-0- O $40,000

On December 31, 20x2, Grayson Inc. changed its inventory valuation method to FIFO from weighted-average. The change will result in an $800,000 increase in the beginning inventory at January 1, 20x2. Assume a 30% income tax rate. The cumulative effect of this accounting change on prior periods that will be reported as an adjustment to the beginning balance of retained earnings is O $560,000 O $800,000 O $-0- O $40,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 3MC

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