Fox has used the FIFO method of inventory valuation since it began operations in 20x6. Fox decided to change to the weighted-average method for determining inventory costs at the beginning of 20x9. The following schedule shows year-end inventory balances under the FIFO and weighted-average methods: Year FIFO Weighted-average 20x6 $45,000 $54,000 20x7 78,000 71,000 20x8 83,000 78,000 What amount, before income taxes, should be reported in the 20x9 retained earnings statement as the cumulative effect of the change in accounting principle?
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Home » Business » Fox has used the FIFO method of inventory valuation since it began operations in 20x6. Fox decided to change to the weighted-average method for determining inventory costs at the beginning of 20x9.