MCQ

On January 1, 2018, Lysol Ltd, changed its inventory valuation method from weighted-average cost to FIFO for financial statement and income tax purposes, to make their reporting as reliable and more relevant. The change resulted in $900,000 increase in the beginning inventory at January 1 , 2020. Assume a 25% income tax rate. The cumulative effect of this accounting change reported for the year ended December 31, 2020 is

a) $900,000

b) $225,000

c) $0

d) $675,000