FIFO = 2,840 (pre-2020) + 770 (2020) = 3,610

Average Cost= $2,430 (pre 2020) + 490 (2020) = 2,920

1. Assume that Raya Co used FIFO before 2021, and in 2021 Raya decided to change to the Average Cost method. Prepare the journal entry to record the change in accounting principle. (Ignore income tax effects.)

2. Assume that prior to 2020, Raya Cos inventory system lost the records used to calculate the inventory value. Prepare the journal entry to record the change in accounting principle. (Ignore income tax effects.)