On January 1, 2010, Roem Corp. changed its inventory method to FIFO from LIFO for both financial and income tax reporting purposes. The change resulted in a 500,000 increase in the January 1, 2010 inventory. Assume that the income tax rate for all years is 30%. The cumulative effect of the accounting change should be reported by Roem in its 2010 a. Retained earnings statement as a 350,000 addition to the beginning balance. b. Income statement as a 350,000 cumulative effect of accounting change. c. Retained earnings statement as a 500,000 addition to the beginning balance. d. Income statement as a 500,000 cumulative effect of accounting change.