Question: On January 1 , 2 0 2 5 , Norton Company changed its inventory costing method from from FIFO to LIFO. If LIFO had been

On January 1,2025, Norton Company changed its inventory costing method from
On January 1,2025, Norton Company changed its inventory costing method from from FIFO to LIFO. If LIFO had been used in 2024, the first year of operations, cost of goods sold would have been $20,000 higher. Norton has an effective tax rate of 21%. What is the after tax effect on retained earnings for 2024 as a result of this accounting change?
Decrease retained earnings $15,800.
Increase retained earnings $15,800.
Decrease retained earnings $4,200 and cost of goods sold $15,800.
Increase retained earnings $20,000.
from FIFO to LIFO. If LIFO had been used in 2024, the

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