Zlata Inc. changed from LIFO to the FIFO inventory costing method on January 1, 20X2. Inventory values at the end of 20X1are as follows:

FIFO LIFO

20X1 $400,000 $360,000

No entry. LIFO changes are reported prospectively. Debit inventory $40,000 Debit retained earnings $40,000 Credit cost of goods sold $40,000