Problem 20-2 (Algo) Change in principle; change in method of accounting for long-term construction [LO20-2] The Pyramid Company has used the LIFO method of accounting for inventory during its first 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 financial reporting purposes. The following table presents information concerning the change for 2019-2021. The income tax rate for all years is 25%. Pyramid issued 42,000 $1 par, common shares for $195,000 when the business began, and there have been no changes in paid-in capital since then. Dividends were not paid the first year, but $12,000 cash dividends were paid in both 2020 and 2021. Required: 1. Prepare the journal entry at January 1,2021 , to record the change in accounting principle. 2. Prepare the 2021-2020 comparative income statements beginning with income before income taxes. 3. Prepare the 2021-2020 comparative statements of shareholders' equity. [Hint: The 2019 statements reported retained earnings of $42,900. This is $57,200($57,20025%)]. Complete this question by entering your answers in the tabs below. 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.)