Stengel plc is preparing its opening IFRS statement of financial position on January 1, 2022. Under its previous GAAP, Stengel used the LIFO inventory method. Under LIFO, its inventory is reported at 250,000; under FIFO, which Stengel will use upon adoption of IFRS, the inventory is valued at 265,000. Prepare the entry (if any) needed to record this adjustment at the date of issuance.

1. Dr. Inventory 15,000 Cr. Retained earnings 15,000

2. Dr. Retained earnings 15,000 Cr. Inventory 15,000

3. Dr Retained earnings 15,000 Cr. Inventory 15,000

4. No entry needed