Sandhill Incorporated decided to change from the FIFO method of valuing inventory to the weighted average method in July 2020 to present more relevant information for its financial statement users. The cumulative effect on prior years of 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, 2020 was $244,500. Sandhill follows ASPE. (a1) Your answer is correct Prepare a partial statement of retained earnings illustrating the adjusted balance of retained earnings. Sandhill Incorporated Statement of Retained Earnings (Partial) For the year ended December 31, 2020 Retained Earnings, January 1, 2020, as Previously Reported 24 Cumulative Effect on Prior Years of Retrospective Application of New Inventory Costing Method 1: Balance January 1, 2020, as Adjusted 26 e Textbook and Media List of Accounts Attempts: 2 of 5 used (22) Prepare the adjusting journal entry for the change in the accounting policy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit e Textbook and Media List of Accounts Save for Later Attempts: 0 of 5 used Submit