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Blue Company began operations in 2018 and for simplicity reasons, adopted weighted average pricing for inventory. In 2020, in accordance with other companies in its
Blue Company began operations in 2018 and for simplicity reasons, adopted weighted average pricing for inventory. In 2020, in accordance with other companies in its industry, Blue changed its inventory pricing to FIFO. The pretax income data is reported below. Year Weighted-Average FIFO 2018 $ 390,200 $ 411,700 2019 398,400 425,800 2020 419,000 463,700 Assume a 35% tax rate in all years. What is Blue's net income in 2020? Net Income $ 301,405 Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing. Net effect $ $
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