Net Income 20X1	Net Income 20X2	Net Income 20X3
FIFO (Old)	90,000	250,000	105,000
Weighted Average (New)	70,000	200,000	85,000

The Chippewa Company decided to change from FIFO to Weighted Average late in Year 20X3. Year 20X1 was the first year of operations. The Statement of Retained Earnings for year-end 12/31/X3 shows two columns, 20X2 and 20X3:

	20X2	20X3
Retained Earnings, Jan. 1, previously reported	__________	__________
Adjustment for cumulative effect on prior years of applying change retrospectively	__________	__________
Retained Earnings, Jan. 1, as adjusted	__________	__________
Net Income	__________	__________
Retained Earnings, Dec. 31	__________	__________

What amount will be shown in the 20X3 column on the Retained Earnings, Jan. 1, as adjusted line?

Select one:

a.

$340,000

b.

$445,000

c.

$270,000

d.

$155,000

e.

$175,000