The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2021. At December 31, 2020, inventories were $121,000 (average cost basis) and were $125,000 a year earlier. Cecil-Booker's accountants determined that the inventories would have totaled $157,000 at December 31, 2020, and $162,000 at December 31, 2019, if determined on a FIFO basis. A tax rate of 25% is in effect for all years.

One hundred thousand common shares were outstanding each year. Income from continuing operations was $410,000 in 2020 and $535,000 in 2021. There were no discontinued operations either year.

Required:

1.Prepare the journal entry at January 1, 2021, to record the change in accounting principle. (All tax effects should be reflected in the deferred tax liability account.)

2.Prepare the 2021-2020 comparative income statements beginning with income from continuing operations (adjusted for any revisions). Include per share amounts.

required 1)

Record the change in accounting principle

required 2)Prepare the 2021-2020 comparative income statements beginning with income from continuing operations (adjusted for any revisions). Include per share amounts.(Round EPS answers to 2 decimal places.)