Change in Accounting Principle Zehms Company began operations in 2008 and adopted weighted-average pricing for inventory. In 2010, in accordance with other companies in its industry. Zehms changed its inventory pricing to FIFO. The pretax income data is reported below.

Instructions
(a) What is Zehms€™s net income in 2010? Assume a 35% tax rate in all years.
(b) Compute the cumulative effect of the change in accounting principle from weight-average to FIFO inventory pricing
(c) Show comparative income statements for Zehms Company, beginning with income before income tax, as presented on the 2010 incomestatement.

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Weighted- FIFO Average Year 2003 S370.000 S305.000 420.000 2009 390.000 460,000 2010 410,000