Determine cumulative effect of accounting change

Reference no: EM13102108

On December 31, 2011, Grantham, Inc. suitably changed its inventory valuation method to FIFO cost from weighted-average cost for financial statement and income tax purposes. Change will result in the $1,500,000 increase in beginning inventory at January 1, 2011. Suppose 30% income tax rate. Determine cumulative effect of this accounting change on beginning retained earnings?

Reference no: EM13102108

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