Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of

$2024,$ Flay decided to change to the LIFO method. As a result of the change, net income in $2024$ was $$82$ million. If the company had

used LIFO in $2023,$ its cost of goods sold would have been higher by $$7$ million that year. Flay's records of inventory purchases and

sales are not available for $2022$ and several previous years. Last year, Flay reported the following net income amounts in its

comparative income statements:

Required:

Prepare the journal entry at the beginning of $2024$ to record the change in accounting principle. $($Ignore income taxes.$)$

Will Flay apply the LIFO cost method retrospectively or apply the LIFO cost method prospectively?

What amounts will Flay report for net income in its $2022-2024$ comparative income statements?

Complete this question by entering your answers in the tabs below.

Required $1$

Prepare the journal entry at the beginning of $2024$ to record the change in accounting principle. $($Ignore income taxes.$)$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

millions $($i$.$e$.,10,000,000$ should be entered as $10).$

Journal entry worksheet

$1$

Record the change in accounting principle.

Note: Enter debits before credits.