Change in Principle—Inventory Methods Whitman Company began operations on January 1, 2008, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2011. The following information is available for the years 2008–2010. (Ignore all tax effects.)
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2011.
(b) Determine net income to be reported for 2008, 2009, and 2010, after giving effect to the change in accounting principle.
(c) Assume Whitman Company used the LIFO method instead of the average cost method during the years 2008–2010. In 2011, Whitman changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.