On December $31,20\backslash$times $2,$ Grayson Inc. changed its inventory valuation method to

FIFO from weighted$-$average. The change will result in an $$800,000$ increase in

the beginning inventory at January $1,20\backslash$times $2.$ Assume a $30\%$ income tax rate. The

cumulative effect of this accounting change on prior periods that will be reported

as an adjustment to the beginning balance of retained earnings is

$$560,000$

$$800,000$

$$-0-$

$$40,000$