On January 1, 2018, Sandhill Corp. changed its inventory method to FIFO from LIFO for both financial and income tax reporting purposes. The change resulted in a $1110000 increase in the January 1, 2018 inventory. Assume that the income tax rate for all years is 30%. The cumulative effect of the accounting change should be reported by Sandhill in its 2018 income statement as a $1110000 cumulative effect of accounting change. retained earnings statement as a $1110000 addition to the beginning balance. retained earnings statement as a $777000 addition to the beginning balance. income statement as a $777000 cumulative effect of accounting change