The The Pyramid Company has used the LIFO method of accounting for inventory during its first two years of operation, 2014 and 2015. beginning decided to change to the average cost method for both tax and financial reporting purposes. The following table presents information the change for 2014 2016. The income tax rate for all years is 40%. Income before Income Tax Average Cost Income Difference LIFO Method Difference Tax Effect after Tax 2014 85,200 56.800 28,400 11.3600 17.040 2015 41,000 32,800 3.280 8.200 4,920 Total 126,200 89,600 $21.960 $36,600 14,640 2016 49,400 45,200 S 1.680 4.200 2.520 Pyramid issued 40,000 $1 par, common shares for $190.000 when the business began, and there have been no changes in paid-in capital since then. Dividends were not paid the first year, but $10,000 cash dividends were paid in both 2015 and 2016. Required 1. Prepare the journal entry to record the change in accounting principle. (If no entry is required for a transaction event, select "No journal entry required in the first account field.) view transaction list view general journal Journal Entry Worksheet Record the change in accounting principle Event General Journal Debit Credit "Enter debits before credits clear entry record entry