Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2021, management decided to change from the average inventory costing method to the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 25%. Before 2020 2020 2021 Income before Income Tax FIFO Average Cost Difference $ 29 million $22 million $7 million 36 million 19 million 17 million 24 million 23 million 1 millionRequired: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 2021-2020 comparative income statements. 3. Indicate the affect of the change in the 2021-2020 comparative statements of shareholders' equity assuming cash dividends were $9.00 million each year and that no dividends were paid prior to 2020.
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