Question: On December 3 1 , 2 0 x 2 , Grayson Inc. changed its inventory valuation method to FIFO from weighted - average. The change

On December 31,20x2, 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 1,20x2. 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
On December 31,20x2, Grayson Inc. changed its inventory valuation method to

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