HW $-$ Ch $20-1$

Wolfgang Kitchens has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning

of $2024,$ Wolfgang decided to change to the LIFO method. Net income in $2024$ was correctly stated as $$122$ million. If the company

had used LIFO in $2023,$ its cost of goods sold would have been higher by $$12$ million that year. Company accountants are able to

determine that the cumulative net income for all years prior to $2023$ would have been lower by $$39$ million if LIFO had been used all

along, but have insufficient information to determine specific effects of using LIFO in $2022.$ Last year, Wolfgang 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.$)$

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

Answer is complete but not entirely correct.

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

Required $1$

Required $3$

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 $10).$