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prior years in 2017 pman Company began operations on January 1, 2015, and uses the be Change from FIFO to Average Cost Koo FIHO inventory method for financial reporting and ginning of 2017, Koopman decided to switch to the average cost inventory m the average cost inventory method for income taxes. At the method for financial reporting. It previously reported the following financial statement information for 2016: 2016 $ 15,000 2016 Retained Earnings Statement Income Statement $100,000 Beginning retained earni 60,000) Add: Net income 25,000 Less: Dividends Cost of goods sold Gross profit Operating expenses Income before income taxes Income tax expense Net income $ 25,500 19,500 $ 15,000 Ending retained earnings 4,500] 0,500 Earnings per share Balance Sheet (12/31/16) 9,000Accounts payable 38,000 Income taxes payoble 64,100 1,800 4,800 Deferred tax liability Common stock, no par Retained earnings Other assets 19,500 An analysis of the accounting records discloses the following cost of goods sold under the FIFO and inventory methods: FIFO Cost of Goods Sold Average Cost of Goods Sold $50,000 60,000 70,000 2015 69,000 80,000 2016 2017 There are no indirect effects of the change in inventory mcthod. Revenues for 2017 total $130,000; operating expenses for 2017 total $30,000. Koopman is subject to a 30% income tax rate in all years t pay, the income taxes payable of a current year in the first quarter of the next year. Koopman had 10,000 shares of common stock out- standing during all years; it paid dividends of $1 per share in 2017. At the end of 2017, Koopman had cash of $10,000, inventory of $24,000, other assets of $70,800, accounts payable of $4,500, and income taxes payable of $6,000. It desires to show financial statements for the current year and previous year in its 2017 annual report. Required: 1. Prepare the journal entry to reflect the change in methods at the beginning of 2017. Show supporting calculations. 2. Prepare the 2017 financial statements. Notes to the financial statements are not necessary. Show supporting