Rockwell corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979

P9-12 Change in Inventory methods (2 pts.) instructions I help El .151. Save&Exit value: 2.00 points Problem 9-12 Change in methods [L09-6] Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2016, the company decided to switch to the average cost method. Data for 2016 are as follows: Beginning inventory, FIFO (6,000 units @ $30) $180,000 Purchases: 6,000 units @ $36 $216,000 6,000 units @ $40 240,000 456,000 Cost of goods available for sale $636,000 Sales for 2016 (10,000 units @ $78) $780,000 Additional lnforrnation: a. The companyfs effective income tax rate is 40% for all years. b. If the company had used the average cost method prior to 2016, ending inventory for 2015 would have been $156,000. c. 8,000 units remained in inventory at the end of 2016. Required: 1. Ignoring income taxes, prepare the 2016 journal entry to adjust the accounts to reect the average cost method. (if no entry is required for a transactionievent, select "No journal entry required" In the rst account eld.) I view transaction list view general journal Journal Entry Worksheet O Record adjustment to reect average cost method. 1 Retained eamlngs 24,000 *Enter debits before credits .-...,... : +'eumm 2. What is the effect of the change in methods on 2016 net income? The effect of the change for the year 2016 is a I in cost of goods sold resulting in a in income before taxes and a(n) in income after tax. References eBook & Resources General Journal Difculty: 3 Hard Problem 9-12 Change Learning Objective: 09-06 in methods [LOB-6] Explain the appropriate accounting treatment required when a change in inventory method is made