Task: During 2007 Lebron James Company changed from FIFO to weighted-average inventory pricing.
Pretax income in 2006 and 2005 (James's first year of operations) under FIFO was $160,000 and $180,000, respectively. Pretax income using weighted-average pricing in the prior years would have been $145,000 in 2006 and $170,000 in 2005. In 2007, Lebron James Company reported pretax income (using weighted average pricing) of $190,000. Show comparative income statements for Lebron James Company, beginning with "Income before income tax," as presented on the 2007 income statement. (The tax rate in all years is 30%.)