HQ Question 3

Wallis Corporation began operations on 1-1-2017. Wallis used the last-in-first-out (LIFO) inventory costing method from 1-1-2017 through 12-31-2019. Presented below are income statement and balance sheet numbers for those 3 years, i.e., based on LIFO. 2017, 2018 and 2019 financial statement numbers based on LIFO Income Statement 2017 2018 2019 CGS - LIFO 10,000 11,000 12,000 Net income 30,000 40,000 50,000 Balance Sheet 2017 2018 2019 12-31 Inventory LIFO 1,000 2,000 3,000 Retained Earnings on 12-31 30,000 55,000 85,000 CGS = cost of goods sold Wallis Corporation changed its inventory costing method to the first-in-first-out method (FIFO) from LIFO as of 1-1-2020. Presented below are the 12-31 inventory figures if the FIFO method had been used for 2019 and earlier years. 2017, 2018 and 2019 financial statement numbers based on FIFO Balance Sheet 2017 2018 2019 12-31 Inventory - FIFO 1,200 2,500 3,600 CGS = cost of goods sold When Wallis issued its 2020 financial statements in February of 2021, it elected to provide comparative statements from 2019 and 2018. The change will be accounted for using the retrospective approach. When Wallis issued its 2020 financial statements in February of 2021, what was the comparative retained earnings from 12-31-2019 ? 84,900 85,500 85,400 85,600 85,100 84,400 84,600 84,500