1.Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2013, Flay decided to change to the LIFO method. As a result of the change, net income in 2013 was $80 million. If the company had used LIFO in 2012, its cost of goods sold would have been higher by $6 million that year. Flay's records of inventory purchases and sales are not available for 2011 and several previous years. Last year, Flay reported the following net income amounts in its comparative income statements:
Flay Foods has always used the FIFO inventory costing method
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Required:
1. Prepare the journal entry at the beginning of 2013 to record the change in accounting principle. (Ignore income taxes.)
2. Briefly describe other steps Flay will take to report the change.
3. What amounts will flay report for net income in its 2013,2011 comparative incomestatements?