1. 25 pts. Cotton Company has the following balance sheets and retained earnings statements:
			2022	2021
Cash			$10,000	$15,000
Receivables			15,000	10,000
Inventories (FIFO)			18,000	23,000
Other Assets			40,000	15,000
			$83,000	$63,000
Capital Stock			$40,000	$30,000
Retained Earnings			43,000	33,000
			$83,000	$63,000
Retained Earnings Jan 1			$33,000	$35,000
Income			15,000	12,000
Dividends			-5,000	-14,000
Retained Earnin Dec 31			$43,000	$33,000
The above incomes and Retained Earnings balances are based on FIFO Cost of Goods Sold.
Cotton changed from FIFO to LIFO on January 1, 2022. December 31, 2022 inventory at LIFO is $17,000 while December 31, 2021 inventory at LIFO is $21,000.
Inventory at January 1, 2021 was zero.
a. Prepare statements in the format above assuming 2022 will be shown by itself without reference to 2021.
b. Journalize the change to LIFO at January 1, 2022.