Joint Lumber is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the West. On January 1, 2021, management decided to change from the average inventory costing method to the FIFO inventory costing method at each of its warehouses. The following table presents information concerning the change. The income tax rate for all years is 25%.

Income before Income Tax
	FIFO			Average Cost			Difference
Before 2020	$	35	million	$	28	million	$	7	million
2020		48	million		25	million		23	million
2021		30	million		29	million		1	million

Required: 1. Prepare the journal entry to record the change in accounting principle.

2. Determine the net income to be reported in the 20212020 comparative income statements.

	2021	2020
Net Income (In Millions)

4. Indicate the affect of the change in the 20212020 comparative statements of shareholders equity assuming cash dividends were $12.00 million each year and that no dividends were paid prior to 2020.

Joint Lumber
Statement of Shareholders Equity
For the Years Ended Dec. 31, 2021 and 2020
($ in millions)	Common Stock	Additional Paid-in Capital	Retained Earnings	Total Shareholders Equity
Balance at Jan. 1, 2020
Balance at Dec. 31, 2020
Balance at Dec. 31, 2021