Use the information below to answer questions 1 - 2:

Chris runs CJM, a small retail marketing business, as a limited liability company that is taxed as a sole proprietorship. CJM currently uses the cash method of accounting. After nine years in the business, the company has grown to a point where Chris believes he should switch to the accrual method of accounting. The business currently has $45,000 in accounts receivable that were not reported in income last year, because he operated the business on a cash basis. Also, he has $11,500 in accounts payable that were incurred in the prior year but were not deductible because no payment was made on them.

1.In Chris's particular situation

A.his filing of Form 3115 must first be amended

B.the IRS will grant automatic approval and consent for the accounting change

C.a six-month waiting period is required before any request of this nature can be acted upon

D.the IRS will have to check all preliminary applications before consent, which is not automatic, is given

2. Does he have to make any adjustments to his income when the approval is granted? If yes, how much?