Schmidt Company began operations on January 1,2018 , and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020 , Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019 : SCHMIDT COMPANY Retained Earnings Statements For Year Ended December 31, 2019 \begin{tabular}{|r|l|r|} \hline 1 & Beginning retained earnings & $27,000.00 \\ \hline 2 & Add: Net income & 19,750.00 \\ \hline 3 & & $46,750.00 \\ \hline 4 & Less: Dividends & (6,000.00) \\ \hline 5 & Ending retained earnings & $40,750.00 \\ \hline \end{tabular} SCHMIDT COMPANY Balance Sheet December 31, 2019 1 Assets Liabilities and Shareholders' Equity \begin{tabular}{|l} 2 \\ \hline \\ \hline \end{tabular} Cash Inventory 4 Other assets 5 6 $110,000.00 \begin{tabular}{r|} \hline 40,750.00 \\ \hline$110,000.00 \\ \hline \hline \end{tabular} CHART OF ACCOUNTS Schmidt Company General Ledger ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable 141 Inventory EXPENSES 152 Prepaid Insurance 500 Cost of Goods Sold 181 Equipment 511 Insurance Expense 189 Accumulated Depreciation 512 Utilities Expense 521 Salaries Expense LIABILITIES 532 Bad Debt Expense 211 Accounts Payable 540 Interest Expense 231 Salaries Payable 541 Depreciation Expense 250 Unearned Revenue 559 Miscellaneous Expenses 260 Deferred Tax Liability 910 Income Tax Expense 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings 1. Prepare the journal entry to reflect the change on January 1, 2020. General Journal Instructions GENERAL JOURNAL