eBook Change in Inventory Cost Flow Assumption Instructions Chart of Accounts General Journal Instructions Heller Company began operations in 2019 and used the LIFO method to compute its $300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been $250,000 in 2019 For 2020, Heller's cost of goods sold under FIFO was $360,000, while it would have been $410,000 under LIFO. Heller is subject to a 21% income tax rate. Assume the pretax cumulative effect adjustment is $50,000. Required: Prepare the journal entry that Heller Company would make at the beginning of 2020 to record the cumulative effect of the change from LIFO to FIFO. X CHART OF ACCOUNTS Heller Company General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 189 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 260 Deferred Tax Liability REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings Prepare the journal entry that Heller Company would make on January 1, 2020 to record the cumulative effect of the change from LIFO to FIFO. General Journal Instructions 1 2 3 DATE GENERAL JOURNAL ACCOUNT TITLE Jan. 1 PAGE 1 POST. REF. DEBIT CREDIT