Tim Mattke Company began operations in 2006 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2008, in accordance with other companies in its industry, Mattke changed its inventory pricing to FIFO. The pretax income data is reported below.

Instructions
(a) What is Mattke's net income in 2008? Assume a 35% tax rate in all years.
(b) Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.
(c) Show comparative income statements for Tim Mattke Company, beginning with income before income tax, as presented on the 2008 income statement.

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ear 2006 2007 Weighted- Average $370,000 FIFO $395,000 430,000 450,000 410,000