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 $115,000 (average cost basis) and were $119,000 a year earlier. Cecil-Bookers accountants determined that the inventories would have totaled $145,000 at December 31, 2020, and $150,000 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 $350,000 in 2020 and $475,000 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 20212020 comparative income statements beginning with income from continuing operations (adjusted for any revisions). Include per share amounts.

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• Required 1
• Required 2

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.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

No	Date	General Journal	Debit	Credit
1	January 01, 2021	Inventoryselected answer correct	30,000selected answer correct	not attempted
		Income tax payableselected answer correct	not attempted	13,600 incorrect
		Retained earningsselected answer correct	not attempted	20,400 incorrect

• Required 1
• Required 2

Prepare the 20212020 comparative income statements beginning with income from continuing operations (adjusted for any revisions). Include per share amounts. (Round EPS answers to 2 decimal places.)

COMPARATIVE INCOME STATEMENTS
	2021	2020
not attempted	$475,000selected answer correct	$349,000selected answer correct
not attempted	190,000selected answer incorrect	139,600selected answer incorrect
not attempted	$285,000	$209,400
Earnings per common share	$2.33selected answer incorrect	$2.09selected answer incorrect