Goddard Company has used the FIFO method of inventory valuationsince it began operations in 2015. Goddard decided to change to theaverage cost method for determining inventory costs at thebeginning of 2018. The following schedule shows year-end inventorybalances under the FIFO and average cost methods:
| Year | FIFO | Average Cost |
| 2015 | $ | 47,000 | | $ | 58,000 | |
| 2016 | | 84,000 | | | 73,000 | |
| 2017 | | 91,000 | | | 84,000 | |
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Required:
1. Ignoring income taxes, prepare the 2018 journalentry to adjust the accounts to reflect the average costmethod.
2. How much higher or lower would cost of goodssold be in the 2017 revised income statement?
