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Change in Accounting Principle, Inventory. Second Thought Products (STP) began operations on January P21-1. 1,2017, and adopted the FIFO method of inventory valuation at that time. Management elected to change its inventory method to the average-cost method effective January 1, 2020. The new method more fairly presents the company’s financial position and results of operations. The following information is available for the years ended December 31, 2017, through December 31, 2020. STP is subject to a 40% income tax rate. The company still uses the FIFO method for income tax reporting. Cost of Goods Sold Under Year Average Cost Method FIFO Method 2017 $176,400 $201,600 2018 117,600 134,400 2019 252,000 277200 2020 285,600 260,400 Required » FIFO ; e from the a. Compute the cumulative effect, net of tax, for the 3-year period needed to record a chang method to the average-cost method. n. . Prepare the journal entry to record the change in accounting for inventory valuatio lines sheet c. Indicate where STP should report the net of tax cumulative effect, assuming that the first ba presented is for the year ended December 31, 2019. 42020 Indicate the cost of goods sold reported on the income statement for 2017, 2018, 2019, an ZL ie Assume that this change in principle is considered to be impractical. Indicate the cost of goods on income statement for 2017, 2018, 2019, and 2020.