Concord Corporation began operations on January $1,2024.$ For the first year of its operations, the

company's controller $($who had taken onfy one introductory accounting course$)$ used the LIFO

method of costing inventories. At the end of the company's second year $($i$.$e$.,$ December $31,2025),$

the company decided to have its financial statements audited, during which the external auditor

informed Concord that LIFO was not an allowable accounting policy choice in Canada. As a

result, Concord changed from L$.$IFO to FIFO at the end of $2025.$ Foltowing is information

regarding the inventory balances at the end of $2024$ and $2025$ :

Instructions

Prepare the necessary journal entry to record the correction of the accounting error. Assume that

year$-$end adjusting entries have been made, but the $2025$ books have not yet been closed. Assume

that Concord has a $25\%$ income tax rate.

Jan $1,2024$