Taveras Co. decides at the beginning of 2014 to adopt the FIFO method of inventory valuation. Taveras had used the LIFO method for financial reporting since its inception on January 1, 2012, and had maintained records adequate to apply the FIFO method retrospectively. Taveras concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The table presents the effects of the change in accounting principle on inventory and cost of goods sold.

Inventory Determined by	Cost of Goods Sold Determined by
Date	LIFO Method	FIFO Method	LIFO Method	FIFO Method
January 1, 2012	$ 0	$ 0	$ 0	$ 0
December 31, 2012	100	80	800	820
December 31, 2013	200	240	1,000	940
December 31, 2014	320	390	1,130	1,100

Retained earnings reported under LIFO are as follows.

Retained Earnings Balance
December 31, 2012	$1,200
December 31, 2013	2,200
December 31, 2014	3,070

Other information:

1.	For each year presented, sales are $3,000and operating expenses are $1,000.
2.	Taveras provides two years of financial statements. Earnings per share information is not required.

1. Prepare income statements reflecting the retrospective application of the accounting change from the LIFO method to the FIFO method for 2014 and 2013.

2. Prepare comparative retained earnings statements for 2013 and 2014 under FIFO.