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On December 31, 2008 Kean Company changed its method of accounting for inventory from weighted average cost method to the FIFO method.

On December 31, 2008 Kean Company changed its method of accounting for inventory from weighted average cost method to the FIFO method. This change caused the 2008 beginning inventory to increase by $420,000. What is the cumulative effect of this accounting change to be reported for the year ended December 31, 2008, assuming a 40% tax rate?
A. $0
B. $420,000
C. $252,000
D. $168,000

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550133_ACC(2).docx

Solution:
1.Deferred tax expense is
Ans: Decrease in balance of deferred tax asset minus the increase in
balance of deferred tax liability
2. On December 31, 2008 Kean Company changed its method...

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