The Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1974. In 2013, the company decided to change to the average cost method. Data for 2013 are as follows:

Begining inventory, FIFO (5000 units @ $30.00) $ 150,000

Purchases:

5000 units @ $36.00 $ 180000

5000 units @ $40.00 $ 200000

$ 380,000 = 180000+ 200000

Cost of good available for sale $530,000 = 380,000+150,000

Sales for 2013 for 2013 (8000 units @ $70.00) $ 560,000

Additional information:

1. The company's effective income tax rate is 40% for all years

2. If the company had used the average cost method prior 2013, ending inventory for 2012 would have beeen $ 130,000

3. 7,000 units remained in inventory at the end of 2013

REQURIED :

1. Prepare the journal entry at the beginning of 2013 to record the change in principle

2. In the 2013- 2011 comparative financial statments, what will be the amounts of Cost of Good Sole and inventory reported for 2013