Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes At the beginning of 2 0 2 4 , Flay decided to change to the LIFO method As a result of the change, net income in 2 0 2 4 was $ 7 0 million If the company had used LIFO in 2 0 2 3 , its cost of goods sold would have been higher by $ 7 million that year Flays records of inventory purchases and sales are not available for 2 0 2 2 and several previous years Last year, Flay reported the following net income amounts in its comparative income statements ( $ in millions ) 2 0 2 1 2 0 2 2 2 0 2 3 Net income$ 7 0 $ 7 2 $ 7 4 Required 1 Prepare the journal entry at the beginning of 2 0 2 4 to record the change in accounting principle ( Ignore income taxes ) 2 Will Flay apply the LIFO cost method retrospectively or apply the LIFO cost method prospectively 3 What amounts will Flay report for net income in its 2 0 2 2 2 0 2 4 comparative income statements

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Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes  At the beginning of 2 0 2 4 , Flay decided to change to the LIFO method  As a result of the change, net income in 2 0 2 4 was $ 7 0 million  If the company had used LIFO in 2 0 2 3 , its cost of goods sold would have been higher by $ 7 million that year  Flays records of inventory purchases and sales are not available for 2 0 2 2 and several previous years  Last year, Flay reported the following net income amounts in its comparative income statements  ( $ in millions ) 2 0 2 1 2 0 2 2 2 0 2 3 Net income$ 7 0 $ 7 2 $ 7 4 Required  1   Prepare the journal entry at the beginning of 2 0 2 4 to record the change in accounting principle  ( Ignore income taxes  ) 2   Will Flay apply the LIFO cost method retrospectively or apply the LIFO cost method prospectively  3   What amounts will Flay report for net income in its 2 0 2 2 2 0 2 4 comparative income statements

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Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2 0 2 4

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