Orlando Company has used the average cost method for inventory valuation since it began business in 2005, but has elected to change to the FIFO method starting in 2008. Year-end inventory valuations under each method are shown below:
Required:
What journal entry, if any, would Orlando record in 2008 for the cumulative effect of the change in accounting principle (ignore income taxes)?

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The Answer of Orlando Company has used the average cost method for inventory valuation since it began business in 2005, but has elected to change to the FIFO method starting in 2008. Year-end inventory valuations under each method are shown below:
Required:
What journal entry, if any, would Orlando record in 2008 for the cumulative effect of the change in accounting principle (ignore income taxes)?

Orlando Company Has Used the Average Cost Method for Inventory