Butler Products decided to change inventory methods on January 1, 2020 to more effectively report its results of operations. In the past, management has measured its ending inventories by the average - cost method and they now believe that FIFO is a better representation of its financial position and profitability. Butler's tax rate is 35% for all years.

Year Ended	FIFO Inventory	Average-Cost Inventory
December 31, 2018	$262,000	$199,000
December 31, 2019	420,000	315,000
December 31, 2020	240,000	190,000

Which one of the following journal entries correctly records the change in the accounting principle?

A. No Entry Needed.

B. Inventory -- 105,000

Deferred Tax Liability ------------- 36,750

Retained Earnings ---------------- 68,250

C. Retained Earnings - 68,250

Deferred Tax Asset - 36,750

Inventory ---------------------- 105,000

D. Deferred Tax Asset - 68,250

Retained Earnings - 36,750

Inventory ---------------- 105,000