On January 1, 2008, Bosco Corp

Multiple Choice

On January 1, 2008, Bosco Corp. changed its inventory method to FIFO from LIFO for both financial and income tax reporting purposes. The change resulted in an $800,000 increase in the January 1, 2008 inventory. Assume that the income tax rate for all years is 30%. The cumulative effect of the accounting change should be reported by Bosco in its 2008

A) retained earnings statement as a $560,000 addition to the beginning balance.
B) income statement as a $560,000 cumulative effect of accounting change.
C) retained earnings statement as an $800,000 addition to the beginning balance.
D) income statement as an $800,000 cumulative effect of accounting change.