-- ----- -- ----- -- --- -- -- --- -- -- --- -- -- -- | Exercise 22-03 Sweet Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation. Sweet had used the LIFO method for financial reporting since its inception on January 1, 2018, and had maintained records adequate to apply the FIFO method retrospectively. Sweet concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on Inventory and cost of goods sold. Income taxes are ignored. cost of Goods Sold Determined by Inventory Determined by LIFO FIFO Method Method $0 FIFO Method ! Date January 1, 2018 December 31, 2018 December 31, 2019 December 31, 2020 LIFO Method $0 850 910 1,170 $0 942 100 220 330 240 370 798 1,150 Retained earnings reported under LIFO are as follows. December 31, 2018 ! December 31, 2019 December 31, 2020 Retained Earnings Balance $910 1,760 2,350 Other information: | 1. 12. For each year presented, sales are $2,740 and operating expenses are $980. Sweet provides two years of financial statements. Earnings per share information is not required. Prepare income statements under LIFO for 2018, 2019, and 2020. Prepare income statements under LIFO for 2018, 2019, and 2020. SWEET CO. Income Statement For the Year Ended December 31 LIFO 2018 2019 2020 Sales Cost of Goods Sold Operating Expenses Net Income /(Loss) Prepare income statements under FIFO for 2018, 2019, and 2020. SWEET CO. Income Statement For the Year Ended December 31 FIFO 2018 2019 2020 Sales Cost of Goods Sold Operating Expenses Net Income /(Loss) $ Prepare income statements reflecting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2020 and 2019. Prepare income statements reflecting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2020 and 2019. SWEET CO. Income Statement For the Year Ended December 31 2019 2020 Sales D $ Cost of Goods Sold Operating Expenses Net Income / (Loss) $ Prepare comparative retained earnings statements for 2019 and 2020 under FIFO. 2019 2020 Retained Earnings, December 31 Less Adjustment for Cumulative Effect of Applying New Acounting Method Retained Earnings, January 1, as adjusted Net Income / (Loss) Retained Earnings, January 1, as reported Click if you would like to Show Work for this question: Open Show Work