Change in Accounting Principle In 2015, Compliance Industries changed its method of inventory valuation. The summary effect of those changes is as follows: Old Method New Method Cost of goods sold 2015 Cost of goods sold-2014 Cost of goods sold-2013., Cost of goods sold 2012 and before........ $25,000 29,000 31,000 51,000 $19.000 21,000 24,000 38.000 Net Income was $120,000, $119,000, and $98,000 for 2015, 2014, and 2013, respectively. The income tax rate is 30% 1. Compute the reported net income for each year if three years of financial statements are issued at the end of 2015. 2. Compute the amount of adjustment that would be made to Retained Earnings as of January 1, 2013