Novak, Inc. changed from the LIFO cast flow assumption to the FIFO cost flow assumption in 2020, The increase in the

Question

Novak, Inc. changed from the LIFO cast flow assumption to the FIFO cost flow assumption in 2020, The increase in the prior year s income before taxesis $1,300 500 The tax rate is 20% Prepare Novak's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry” for the account titles and enter OQ for the amounts.) Account Titles and Explanation Debit Credit

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Journal Entry: Account Titles and Explanation Debit Credit Inventory $1,300,500 Deferred Tax Liability($1,300,500*20%) $260,100 Retained Earnings $1,040,400 (Being entry made to record the change in accounting principal)

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Novak, Inc

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Journal Entry:
Account Titles and Explanation	Debit	Credit
Inventory	$1,300,500
Deferred Tax Liability($1,300,500*20%)		$260,100
Retained Earnings		$1,040,400
(Being entry made to record the change in accounting principal)