Blago Wholesale Company began operations on January 1, 2014, and uses the average cost method in costing its inventory. Management is contemplating a change to the FIFO method in 2015 and is interested in determining how such a change will affect net income. Accordingly, the following information has been developed:

Condensed income statements for Blago Wholesale appear below:

Required:
Based on this information, what would 2015 net income be after the change to the FIFO method? Ignore any income tax effects of this change in accountingmethod.

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2014 2015 Final inventory Average cost FIFO $150,000 160,000 $255,000 270,000 2014 2015 1000,000 1200,000 Sales Cost of goods sold Gross profit Selling, general, and administrative Net income 600,000 400,000 250.000 S 150,000 720,000 480,000 275,000 205,000