On January 1, 2020, Bluebird Ltd

Multiple Choice

On January 1, 2020, Bluebird Ltd. changed its inventory valuation method from weighted-average cost to FIFO for financial statement and income tax purposes, to make their reporting as reliable and more relevant. The change resulted in a $ 900,000 increase in the beginning inventory at January 1, 2020. Assume a 25% income tax rate. The cumulative effect of this accounting change reported for the year ended December 31, 2020 is

A) $ 0.
B) $ 225,000.
C) $ 675,000.
D) $ 900,000.