Prepare the adjusting journal entry for the change in the accounting policy. List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.$)$Sandhill Incorporated decided to change from the FIFO method of valuing inventory to the weighted average method in July $2023$ to

present more relevant information for its financial statement users. The cumulative effect on prior years of a retrospective application

of the new inventory costing method was determined to be $$19,500$ net of $$16,000$ tax. As prices were decreasing, cost of goods sold

is lower and ending inventory higher for the preceding period. Retained earnings on January $1,2023$ was $$244,500.$ Sandhill follows

ASPE.

$($a$)$

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Prepare a partial statement of retained earnings illustrating the adjusted balance of retained earnings.

Sandhill Incorparated

Statement of Retained Earnings $($Partial$)$

For the Year Ended December $31,2023$

Retained Earnings, January $1,2023,$ as Previously Reported

Cumulative Effect on Prior Years of Retrospective Application of New Inventory Costing Method

Balance January $1,2023,$ as Adjusted

$

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List of Accounts

Attempts: $1$ of $1$ used

$($b$)$

Prepare the adjusting journal entry for the change in the accounting policy. $($List all debit entries before credit entries. Credit account

titles are automatically indented when the amount is entered. Do not indent manually.$)$

Account Titles and Explanation

Debit

Credit

Retained Earnings