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Rawlins Inc began operations in 2018 and used a weighted average inventory method. In 2020, Rawlins decided to change to a FIFO inventory method. The
Rawlins Inc began operations in 2018 and used a weighted average inventory method. In 2020, Rawlins decided to change to a FIFO inventory method. The pretax income data is presented below: Year Pretax income Pretax income with Weighted with FIFO Average 2018 $170,000 $180,000 2019 $220,000 $250,000 2020 $175,000 $190,000 Assume the company has a 30% tax rate. How much would Rawlins adjust Retained Earnings in 2020 due to the change in inventory methods? 555.000 5 40.000 528.000 538,500
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