Part IV: LIFO to FIFO Change

At year-end, Utica Corporation announced it would change its inventory valuation method from LIFO to FIFO. Assume that the difference between LIFO and FIFO is $8.4 million and purchase prices had historically been rising.

Required: Describe the financial effects of this policy change on the balance sheet, the income statement and the statement of cash flows. (Ignore any tax effects).