Johnston Controls began operations in 2018 using FIFO inventory methods. On January 1, 2019, management decided they should have chosen to use LIFO, as it more accurately reflects income. The beginning 2019 inventory using FIFO was $100,000. Under the LIFO method the beginning inventory would have been $120,000.
Required: Prepare the journal entry to record the change in accounting principle and discuss the required disclosures.

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The Answer of Johnston Controls began operations in 2018 using FIFO inventory methods. On January 1, 2019, management decided they should have chosen to use LIFO, as it more accurately reflects income. The beginning 2019 inventory using FIFO was $100,000. Under the LIFO method the beginning inventory would have been $120,000.
Required: Prepare the journal entry to record the change in accounting principle and discuss the required disclosures.

Johnston Controls Began Operations in 2018 Using FIFO Inventory Methods