As the recently appointed auditor for Culver Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Culver Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Credit Jan. 4 Jan. 5 Jan. 31 Debit 948,000 76,320 Balance 948,000 1,024,320 96,600 1,120,920 872,920 248,000 Feb. 11 March 31 Research and development costs Legal costs to obtain patent Payment of 7 months' rent on property leased by Culver Premium on common stock Unamortized bond discount on bonds due March 31, 2040 Promotional expenses related to start-up of business Operating losses for first 6 months 127,200 1,000,120 April 30 228,900 241,500 1,229,020 1,470,520 June 30 CONCORD INSTRUMENT COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED MAY 31 2016 2017 2018 2019 2020 $13.970 $15,400 $16,840 $18,360 $19,050 Sales-net Cost of goods sold Beginning inventory Purchases Ending inventory 1,010 1.110 1,010 1.130 1.230 12,910 13,980 14,970 15.940 17,125 (1110) (1,010) (1,130) (1,230) (1,390) Total 12,810 14,080 14,850 15.840 16,965 1.160 1.320 1,990 2.520 2,085 700 760 830 900 990 Gross profit Administrative expenses Income before taxes Income taxes (50%) Net income 460 560 1.160 1.620 1.095 230 280 580 810 548 230 280 580 810 547 Retained earnings-beginning 1.220 1,450 1,730 2.310 3.120 Retained earnings-ending $1.450 $1,730 $2,310 $3,120 $3,667 Earnings per share $2.30 $2.80 $5.80 $8.10 $5.47 SCHEDULE OF INVENTORY BALANCES USING AVERAGE-COST METHOD FOR THE YEARS ENDED MAY 31 2015 2016 2017 2018 2019 2020 $1,020 $1,140 $1,110 $1,290 $1,490 $1,740 Prepare comparative statements for the 5 years, assuming that Concord changed its method of inventory pricing to average-cost. Indicate the effects on net income and earnings per share for the years involved. Concord Instruments started business in 2015. Assume that the number of shares outsanding is 100. (Enter amounts that decrease cost of goods sold using either a negative sign preceding the number e.g.-15,000 or parentheses eg. (15,000). Round all amounts except EPS to the nearest whole dollar, e.g. 5,275. Round Earnings Per Share to 2 decimal places, e.g. 1.62. Round up the tax effects to the next whole dollar.) Ending inventory - 1140 -1110 - 1290 Total 12790 14010 14790 Gross profit 1180 1390 2050 Administrative expenses 700 760 830 Income before taxes 480 630 1220 Income taxes 240 315 610 Net income 240 315 610 Retained earnings-beginning As originally reported 1220 1450 1730 Adjustment 15 50 80 As restated 1235 1500 1810 Retained earnings-ending 1475 $ 1815 2420 Earnings per share 2.4 $ 3.15 6.10 -1110 - 1290 -1490 - 1740 14010 14790 15740 16875 i 1390 2050 2620 2175 760 830 900 i 990 630 1220 1720 1185 315 610 860 i 592.5 i 315 610 860 592.5 1450 1730 2310 3120 50 80 130 175 1500 1810 2440 3295 $ 1815 2420 $ 3300 3887.5 $ 3.15 6.10 $ 8.6 5.925