Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 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 $$75$ million. If the company hac

used LIFO in $2023,$ its cost of goods sold would have been higher by $$5$ 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. $($lgnore 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 $2$

Will Flay apply the LIFO cost method retrospectively or apply the LIFO cost method prospectively? 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 $$75$ million. If the company had

used LIFO in $2023,$ its cost of goods sold would have been higher by $$5$ 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 $2$

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

Note: Enter your answers in millions $($i$.$e$.,10,000,000$ should be entered as $10).$

$2024,$ Flay decided to change to the LIFO method. As a result of the change, net income in $2024$ was $$75$ million. If the company had

used LIFO in $2023,$ its cost of goods sold would have been higher by $$5$ 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. $($lgnore 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.

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.