Below is the net income of Jones Laboratories computed under thethree inventory methods.

		FIFO		Average Cost		LIFO
2005		$75,000		$50,000		$30,000
2006		55,000		50,000		38,000
2007		58,000		50,000		42,000
2008		60,000		50,000		40,000

Instructions

(Ignore tax considerations.)

(a) Assume that in 2008 Jones decided to changefrom the average-cost method to the FIFO method of pricinginventories. Prepare the journal entry necessary for the changethat took place during 2008 and show net income reported for 2006,2007, and 2008.