Question: Shannon, Inc. changed from the average cost to the FIFO cost flow assumption in 2010. The increase in the prior years income before taxes is

Shannon, Inc. changed from the average cost to the FIFO cost flow assumption in 2010. The increase in the prior year’s income before taxes is 1,200,000. The tax rate is 40%. Prepare Shannon’s 2010 journal entry to record the change in accounting policy.

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