Inc. has tentatively computed income before taxes as $220,000 for 2021. Retained earnings at the beginning of 2021 had a balance of $1,200,000. Dividends of $90,000 were paid during 2021. There were dividends payable of $20,000 at the end of 2020 and $30,000 at the end of 2021. The following information has been provided:

a)The company used FIFO for costing inventory in deriving the income of $220,000. Management wishes to change to weighted average cost to be comparable with other companies in the industry and further believes the change in inventory policy will result in more relevant financial information. Accordingly, the change in policy should be applied retroactively. The comparable figures for ending inventory under the two methods are as follows: