Change in Accounting Principle, Inventory. J& S Arnez Company began operations in 2015 and initially adopted the weighted-average method for inventory valuation. In 2017, in accordance with the inventory valuation policies followed by other companies in its industry, Arnez changed its inventory pricing to the FIFO method. The company still uses the weighted average method of inventory valuation for income tax purposes. Arnez has a 30% tax rate. The pretax income data is reported below.

Required
a. What is J& S Arnez€™s net income in 2017?
b. Compute the cumulative effect on retained earnings from the change in accounting principle from weighted-average to FIFO pricing (up to but not including the year of the change).
c. S how condensed, comparative income statements for J& S Arnez Company, beginning with income before taxes, as presented on the 2017 income statement.

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Weighted Average AFO $553,000 602,000 630,000 Year 2015 $8.000 2016 2017 546,000 574,000