On January 1, 2020, Bluebird Ltd. changed its inventory valuation method from weighted-average cost to FIFO for
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Question:
On January 1, 2020, Bluebird 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 a $ 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.$ 0.
b.$ 675,000.
c.$ 225,000.
d.$ 900,000.
Posted Date: