Grady changed to LIFO at the beginning of 2017. December 31 inventories at LIFO were $14,000 for 2016 and $20,000 for 2017. The beginning inventory of 2016 was zero.

Recast the above Income and Retained Earnings statement for 2017 under LIFO, assuming that 2017 will be shown alone and without any comparison to 2016.

Journalize the prior period correction at January 1, 2017.

1. (20 pts) The financial statements using FIFO of Grady Company for 2016 and 2017 appear below: Dec 31, 2017 Dec 31, 2016 Cash Receivables Inventories (FIFO) Other Assets $10,000 12,000 21,000 30,000 $73,000 $15,000 10,000 18,000 20,000 $63,000 $30,000 $73,000 $ 10,000 $30,000 33,000 $63,000 Capital Stock Retained Earnings 43,000 Income $ 10,000 Retained Earnings 1/1 33,000 0 Retained Earnings 12/31$ 43,000 $ 33,000 10,000 $ 33,000 Dividends