(Accounting Change)

During 2016 (its first year of operations) and 2017, Broncos Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2018, Broncos decided to change to the average method for both financial reporting and tax purposes.

Income components before income tax for 2018, 2017, and 2016 were as follows:

($ in millions) 201620172018

Revenue 380390420

COGS (FIFO) (38)(40)(46)

COGS (average) (52)(56)(62)

Operating expenses (242)(250)(254)

Dividends of $20 million were paid each year.Broncos' fiscal year ends December 31.

Required:

Prepare the 2018-2017 comparative income statements.