Presented below are income statements prepared on a LIFO and FIFO basis for Waterway Company, which started operations on January 1, 2016. The company presently uses the LIFO method of pricing its inventory and has decided to switch to the FIFO method in 2017. The FIFO income statement is computed in accordance with the requirements of GAAP Waterway's profit-sharing agreement with its employees indicates that the company will pay employees 10% of income before profit-sharing, Income taxes are ignored. Sales Cost of goods sold Operating expenses Income before profit-sharing Profit-sharing expense Net income LIFO Basis FIFO Basis 2017 2016 2017 2016 $3,030 $3,030 $3,030 $3,030 1,160 1,050 1,080 980 990 990 990 880 990 960 1,060 99 $857 $961 Answer the following questions If comparative income statements are prepared, what net income should Waterway report in 2016 and 2017 (Round answers to decimal places, eg. 125) 2017 2016 Net incomes Assume that Waterway has a beginning balance of retained earnings at January 1, 2017, of $891 using the LIFO method. The company declared and paid dividends of $520 in 2017. Prepare the retained earnings statement for 2017, assuming that Waterway has switched to the FIFO method. (Round answers to decimal places, ex 125) WATERWAY COMPANY Retained Earnings Statement