QUESTION 1 PT ABC uses the weighted average method to calculate its inventory. In 2020, PT ABC decided to change its inventory valuation method to the FIFO method. Data on sales, purchases, operating costs, and cash flows from operations can be seen in the following table.

	2018	2019	2020
Sale	700 millions	650 millions	650 millions
Purchase	200 millions	200 millions	250 millions
Operation cost	350 millions	350 millions	300 millions
Cash flow from operations	150 millions	50 millions	100 millions

The following table shows the inventories of the two existing inventory valuation methods.

	Average Cost	FIFO	Difference
1 January 2018	0	0	0
31 Desember 2018	50 millions	55 millions	5 millions
31 Desember 2019	75 millions	85 millions	10 millions
31 Desember 2020	95 millions	110 millions	15 millions

The following table shows a comparison of COGS with the two existing methods.

	Average Cost	FIFO	Difference
2018	150 millions	145 millions	5 millions
2019	225 millions	220 millions	5 millions
2020	230 millions	225 millions	5 millions

Requested: a. What is the impact of changes in accounting policies on the company's financial statements if the tax impact is ignored? b. What is the impact of changes in accounting policies on financial statements if taxes are taken into account? 25% tax rate. c. Journalize the changes.