Cullumber Incorporated decided to change from the FIFO method of valuing inventory to the weighted average method in July 2020 to present more relevant information for its financial statement users. The cumulative effect on prior years of retrospective application of the new inventory costing method was determined to be $ 24,000 net of $ 5,500 tax. As prices were decreasing, cost of goods sold is lower and ending inventory higher for the preceding period. Retained earnings on January 1, 2020 was $ 253,000. Cullumber follows ASPE.

Cullumber Incorporated decided to change from the FIFO method of valuing inventory to the weighted average method in July 2020 to present more relevant information for its financial statement users. The cumulative effect on prior years of retrospective application of the new inventory costing method was determined to be $ 24,000 net of $5,500 tax. As prices were decreasing cost of goods sold is lower and ending inventory higher for the preceding period. Retained earnings on January 1, 2020 was $ 253,000 Cullumber follows ASPE Prepare a partial statement of retained earnings illustrating the adjusted balance of retained earnings. Cullumber Incorporated Statement of Retained Earnings (Partial) e Textbook and Media List of Accounts Prepare the adjusting journal entry for the change in the accounting policy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit