Question: On January 1, 2018, Frost Corp. changed its inventory method to FIFO from LIFO, for both financial and income tax reporting purposes. The change resulted

On January 1, 2018, Frost Corp. changed its inventory method to FIFO from LIFO, for both financial and income tax reporting purposes. The change resulted in a $900,000 increase in the January 1, 2018 inventory. Assume that the income tax rate for all years is 30%. The cumulative effect of the accounting change should be reported by Frost in its 2018 ________.

retained earnings statement, as a $630,000 addition to the beginning balance

income statement, as a $630,000 cumulative effect of accounting change

retained earnings statement, as a $900,000 addition to the beginning balance

income statement, as a $900,000 cumulative effect of accounting change

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