Exercise 22-3 Taveras Co. decides at the beginning of 2014 to adopt the FIFO method of inventory valuation. Taveras had used the LIFO method for financial reporting since its inception on January 1, 2012, and had maintained records adequate to apply the FIFO method retrospectively. Taveras concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The table presents the effects of the change in accounting principle on inventory and cost of goods sold Inventory Determined Cost of Goods Sold Determined by by LIFO FIFO Method Method LIFO Method FIFO Method ate. 0 0 0 0 January 1, 2012 December 31, 2012 101 72 796 825 December 31, 2013 209 249 1,008 939 December 31, 2014 330 402 1,132 1,100 Retained earnings reported under LIF are as follows. O Retained Earnings Balance December 31, 2012 $2,299 December 31, 2013 4,386 December 31, 2014 6,349 Other information: 1. For each year presented, sales are $4,105 and operating expenses are $1,010 2. Taveras provides two years of financial statements Earnings per share information is not required Prepare income statements under LIFO for 2012, 2013, and 2014 TAVERAS CO. Income Statement For the Year Ended December 31 LIFO 2012 2014 Prepare income statements under FIFO for 2012, 2013, and 2014 TAVERAS Co., Income Statement For the Year Ended December 31 FIFO 2012 2013 2014 Prepare income statements reflecting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2014 and 2013