Butler Products Decided in 2020 to Change Inventory Methods to More

Butler Products decided in 2020 to change inventory methods to more effectively report its results of operations. In the past, management has measured its ending inventories by the average-cost method and they now believe that FIFO is a better representation of its profitability. $$\begin{array} { c c c } \underline{\text { Year Ended } }& \underline{ \text { FIFO Inventory }} & \underline{ \text { Average-Cost Inventory} } \\\text { December 31,2018 } & \$ 250,000 & \$ 195,000 \\\text { December 31, 2019 } & 390,000 & 329,000 \\\text { December 31,2020 } & 240,000 & 190,000\end{array}$$
Ignoring income tax, which one of the following journal entries correctly records the change in the accounting principle at January 1, 2020?

A) No journal entry needed for a prospective application of the change in principle.
B) $\begin{array}{llcc} \text {Retained Earnings } &61,000 \\\text { Inventory }&&61,000 \\\end{array}$

C) $\begin{array}{llcc} \text { Inventory} &61,000 \\ \text {Retained Eamings }&&61,000 \\\end{array}$

D) $\begin{array} {ll} \text { Inventory }&56,000 \\\text { Retained Earnings }&&56,000\end{array}$