Financial Accounting: E4-14 Tim Mattke Company began operations

Financial Accounting
E4-14 Change in Accounting Principle
Tim Mattke Company began operations in 2012 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2014, in accordance with other companies in its industry, Mattke changed its inventory pricing to FIFO. The pretax income data is reported below.
Weighted-Year Average FIFO
2012 370,000 395,000
2013 390,000 430,000
2014 410,000 450,000

Instructions
(a) What is Mattkeā€™s net income in 2014? Assume a 35% tax rate in all years.
(b) Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.
(c) Show comparative income statements for Tim Mattke Company, beginning with income before income tax, as presented on the 2014 income statement.
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