Goddard Company has used the FIFO method of inventory valuation since it began operations in 2010. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2013. The following schedule shows year-end inventory balances under the FIFO and average cost methods:

Goddard Company has used the FIFO method of inventory valuation since it began operations in 2010. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2013. The following schedule shows year-end inventory balances under the FIFO and average cost methods:

Year	FIFO			Average cost
2010	$	45,000		$	54,000
2011		78,000			71,000
2012		83,000			78,000

Required:
1.	Ignoring income taxes, prepare the 2013 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for an event, select "No journal entry required" in the first account field.)

2.How much higher or lower would cost of goods sold be in the 2012 revised income statement?