= Homework: Week Four Question 13, BE21-3 (similar to) Part 1 of 2 HW Score: 4.76%, 1 of 21 points Points: 0 of 1 Save Lee Hudson Manufacturing Company changed its method of accounting for inventory from the average-cost method to the LIFO basis as of January 1 of the current year. It still uses the average-cost method for tax purposes. The company is subject to a 30% tax rate. Cumulative cost of goods sold reported prior to the current year is $144,000 under the average-cost method and it would have been $310,000 if Lee had always used the LIFO method. Draft a footnote to disclose the accounting change implemented by the Lee Hudson Manufacturing Company. Assume that pre-tax income for the current year is $238,000 under the LIFO method but would have been $451,000 under the prior average-cost method. Use the caption "Note F: Change in Method of Accounting for Inventory Valuation." Note F: Change in Method of Accounting for Inventory Valuation On January 1 of the current year, Lee changed its method of valuing inventory from the average-cost method to the LIFO method. The new method of accounting for inventory considered preferable because it Lee's net income by matching increased costs of production with higher selling prices. Comparative financial statements have been adjusted to apply the new method income for the current year is Inventory was As a result of the change to the LIFO method, pre-tax as compared to the results obtained if the average-cost method was still used. at the beginning of the year by $