Question - During 2017, Orca Corp. decided to change from the FIFO method of inventory valuation to the weighted-average method. Inventory balances under each method were as follows:
|
FIFO
|
Weighted-average
|
|
January 1, 2017
|
$71,000
|
$77,000
|
|
December 31, 2017
|
$79,000
|
$83,000
|
Orca's income tax rate is 30%.
In its 2017 financial statements, what amount should Orca report as the cumulative effect of this accounting change?