In 20X2, ABBA Fabrics, Inc., elected to change its method of valuing inventory to the weighted average cost (WAC) method, whereas in all prior years inventory was valued using the last-in, first-out (LIFO) method. The company determined that the WAC method of accounting for inventory is preferable as the method better reflects ABBAs inventory at current costs and enhances the comparability of its financial statements by changing to the predominant method utilized in its industry.

Condensed financial statements for 20X2 (using WAC) and 20X1 (as originally reported) appear below. Inventory as originally reported at December 31, 20X1 ($77,907), and December 31, 20X0 ($127,574), increases by $36,382 and $37,432, respectively under WAC.

Ignore income taxes.

ABBA Fabrics, Inc., Balance Sheets December 31,
(in thousands)	20X2 (Under WAC)				20X1 (Under LIFO)
Current assets:
Cash and cash equivalents	$	2,338			$	2,280
Receivables, less allowance for doubtful accounts		3,380				4,453
Inventories, net		104,156				77,907
Other current assets		1,735				9,866
Total current assets		111,609				94,506
Long-term assets		53,065				56,438
Total assets		164,674				150,944
Total liabilities		117,325				123,888
Common stock		88,348				75,650
Retained earnings		124,907				100,953
Treasury stock		(153,684	)			(153,622	)
Accumulated other comprehensive income		(12,222	)			4,075
Total liabilities and shareholders equity	$	164,674			$	150,944

ABBA Fabrics, Inc., Statements of Operations Years Ended December 31,
(in thousands)	20X2 (Under WAC)				20X1 (Under LIFO)
Sales	$	276,381			$	276,247
Cost of goods sold		(156,802	)			(157,617	)
Gross profit		119,579				118,630
Selling, general, and administrative expenses		(112,106	)			(117,815	)
Depreciation and amortization		(4,409	)			(3,815	)
Operating income (loss)	$	3,064			$	(3,000	)

Required:

1-A. Restate the 20X1 balance sheet as it should appear for comparative purposes in the 20X2 annual report.

1-B. Restate the 20X1 statement of operations as it should appear for comparative purposes in the 20X2 annual report.