Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid South On January 1, 2021, management decided to change from the average inventory costing method to the FIFO inventory costing method at each of its outlets 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 $ 58 million $ 30 million $ 28 million 2020 44 million 24 million 20 million 2021 48 million 32 million 16 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 4 Indicate the affect of the change in the 20212020 comparative statements of shareholders equity assuming cash dividends were $5 50 million each year and that no dividends were paid prior to 2020

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Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January

Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2021, management decided to change from the average inventory costing method to the FIFO inventory costing method at each of its outlets. 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	$	58	million	$	30	million	$	28	million
2020		44	million		24	million		20	million
2021		48	million		32	million		16	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. 4. Indicate the affect of the change in the 20212020 comparative statements of shareholders equity assuming cash dividends were $5.50 million each year and that no dividends were paid prior to 2020.