Question: During year 3, Orca Corp. decided to change from the FIFO method of inventory valuation to the weightedaverage method. Inventory balances under each method were

During year 3, Orca Corp. decided to change from the FIFO method of inventory valuation to the weightedaverage method. Inventory balances under each method were as follows:

FIFOWeightedaverageJanuary 1, year 3$71,000$77,000December 31, year 379,00083,000

Orca's income tax rate is 30%.

In accordance with the Codification, Orca should report the effect of this accounting change as a(n)

Group of answer choices

-Prior period adjustment.

-Component of income from continuing operations.

-Retrospective application to previous year's financial statements.

-Component of income after extraordinary items.

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