1.Prepare income statements under LIFO for 2018, 2019, and 2020. 2.Prepare income statements under FIFO for 2018, 2019, and 2020. 3.Prepare income statements reflecting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2020 and 2019.

4.Prepare comparative retained earnings statements for 2019 and 2020 under FIFO.

Sheffield Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation. Sheffield 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. Sheffield 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. Inventory Determined by Cost of Goods Sold Determined by Date LIFO Method FIFO Method LIFO Method FIFO Method January 1, 2018 $0 $0 $0 $0 December 31, 2018 100 8 780 872 December 31, 2019 210 260 1.100 958 December 31, 2020 320 390 1,250 1,230 Retained earnings reported under LIFO are as follows. Retained Earnings Balance December 31, 2018 $1,420 December 31, 2019 2,520 December 31, 2020 3,470 Other information: 1. For each year presented, sales are $3,230 and operating expenses are $1,030. 2. Sheffield provides two years of financial statements. Earnings per share information is not required