Question 3

Splish Company started operations on January 1, 2015, and has used the FIFO method of inventory valuation since its inception. In 2021, it decides to switch to the average-cost method. You are provided with the following information.

		Net Income				Retained Earnings (Ending Balance)
		Under FIFO		Under Average-Cost		Under FIFO
2015		$100,900		$90,800		$100,900
2016		72,600		67,500		150,200
2017		81,000		71,100		257,300
2018		120,400		131,300		331,100
2019		300,000		290,000		545,300
2020		320,200		324,700		849,300

(a) What is the beginning retained earnings balance at January 1, 2017, if Splish prepares comparative financial statements starting in 2017?

Retained earnings, January 1

$enter the Retained earnings at January 1 in dollars

(b) What is the beginning retained earnings balance at January 1, 2020, if Splish prepares comparative financial statements starting in 2020?

Retained earnings, January 1

$enter the Retained earnings at January 1 in dollars

(c) What is the beginning retained earnings balance at January 1, 2021, if Splish prepares single-period financial statements for 2021?

Retained earnings, January 1

$enter the Retained earnings at January 1 in dollars

(d) What is the net income reported by Splish in the 2020 income statement if it prepares comparative financial statements starting with 2018?

		2018		2019		2020
Net Income		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount