The answers are bolded. Please provide detailed explanation on how to get the answers. Thank you.

31. On December 31, 2014, Dodd, Inc. appropriately changed its inventory valuation method to FIFO cost from weighted-average cost for financial statement and income tax purposes. The change will result in a $2,300,000 increase in the beginning inventory at January 1, 2014. Assume a 30% income tax rate. The cumulative effect of this accounting change on beginning retained earnings is

$1,610,000.

$2,300,000.

$690,000.

$0.