Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of

The inventory as reported at the end of $2020$ using LIFO would have been $$63,000$ higher using FIFO. Retained earnings at the

end of $2020$ was reported as $$810,000($reflecting the LIFO method$).$ The tax rate is $40\%.$

Required:

Calculate the balance in retained earnings at the time of the change $($beginning of $2021)$ as it would have been reported if FIFO had

been used in prior years.

Prepare the journal entry at the beginning of $2021$ to record the change in accounting principle.

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Calculate the balance in retained earnings at the time of the change $($beginning of $2021)$ as it would have been reported if

FIFO had been used in prior years.

Balance in retained earnings