The Coclin Company has used the LIFO method of accounting for inventory during its first two years of operation, $2022$ and $2023.$ At the

beginning of $2024,$ Coclin decided to change to the average cost method for both tax and financial reporting purposes. The following table presents

information concerning the change for $2022-2024.$ The income tax rate for all years is $25\%.$

Coclin issued $50,000$$$1$ par, common shares for $$230,000$ when the business began, and there have been no changes in paid$-$in capital since

then. Dividends were not paid the first year, but $$10,000$ cash dividends were paid in both $2023$ and $2024.$

Required:

Prepare the journal entry at January $1,2024,$ to record the change in accounting principle.

Prepare the $2024-2023$ comparative income statements beginning with income before income taxes.

Prepare the $2024-2023$ comparative statements of shareholders' equity. $[$Hint: The $2022$ statements reported retained earnings of $$45,000.$

This is $$60,000-($$$60,00025\%).]$