Johnston Controls Began Operation in 2017 Using FIFO Inventory Methods

Multiple Choice

Johnston Controls began operation in 2017 using FIFO inventory methods. In 2018, management decided they should have chosen LIFO to more accurately portray financial position and performance. The beginning 2018 inventory using FIFO was $200,000. Under the LIFO method the beginning inventory would have been $240,000. The adjustment to inventory for the accounting principle change for 2017 would be ________.

A) $0
B) $20,000 debit
C) $40,000 credit
D) $40,000 debit