On December 31, 2021, OTTO Company changed its method of accounting for inventory from weighted average cost method to the FIFO method. This change caused the 2021 beginning inventory to increase by $840,000. The cumulative effect of this accounting change to be reported for the year ended 12/31/21 assuming the company presents financial statements for one year, and assuming a 40% tax rate, will be which of the following?

1. $336,000

2. $0

3. $840,000

4. $504,000