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The Pyramid Company has used the LIFO method of accounting for inventory during its rst two years of operation, 2019 and 2020. At the beginning of 2021, Pyramid decided to change to the average cost method for both tax and nancial reporting purposes. The following table presents information concerning the change for 20192021. The income tax rate for all years is 25%. Income before Income Tax Using Average Cost Using LIFO Inconm Difference Method Method Difference Tax Effect after Tax 2919 $ 93,999 $ 92,499 $31, 299 $ 7, 999 $23,499 2929 49,999 39,499 9,999 2,499 7, 299 Total $141,588 $188,888 $48,888 $18,288 $38,688 2821 $ 52,288 $ 46,688 $ 5,688 $ 1,488 $ 4,288 Pyramid issued 61,000 $1 par, common shares for $260,000 when the business began. and there have been no changes in paidin capital since then. Dividends were not paid the rst year, but $10,000 cash dividends were paid in both 2020 and 2021. Required: 1. Prepare thejournal entry at January 1, 2021, to record the change in accounting principle. 2. Prepare the 20212020 comparative income statements beginning with income before income taxes. 3. Prepare the 20212020 comparative statements of shareholders' equity. [Hint The 2019 statements reported retained earnings of $46,800. This is $62,400 [$62,400 X 25%)]. Required 1 Required 2 Required 3 Prepare the journal entry at January 1, 2021, to record the change in accounting principle. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the change in accounting principle. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the 2021-2020 comparative income statements beginning with income before income taxes. (Round EPS answers to 2 decimal places.) COMPARATIVE INCOME STATEMENTS 2021 2020 $ 0 $ Earnings per share Homework 0 Saved Help Cumpllta this quuon by antarlnn your answer! In the tab. below. Required 1 Required 2 Required 3 Prepare the 20212020 comparative statements of shareholders' equity. [Hint: The 201$;| statements reported retained earnings of $46,300. This Is $62,400 ($62,400 3-: 25%).] {Deductions should be indicated by a minus sign.) Balance at Jan. 1, 2020 Net income Cash dividends Balance at Dec. 31, 2020 Net income Cash dividends Balance at Dec. 31, 2021 $ 0 $ 0