The management of Blue Instrument Company had concluded, with the concurrence of its independent auditors, that results of operations would be more fairly presented if Blue changed its method of pricing inventory from last-in, first-out (LIFO) to average-cost in 2020. Given below is the 5-year summary of income under LIFO and a schedule of what the inventories would be if stated on the average-cost method. 2020 $18,780 BLUE INSTRUMENT COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED MAY 31 2016 2017 2018 2019 Sales-net $13,960 $15,530 $ 16,800 $18,350 Cost of goods sold Beginning inventory 1,000 1,090 1,000 1,120 Purchases 13,020 13,980 14,980 15,740 Ending inventory (1,090) (1,000) (1,120) (1,230) Total 12,930 14,070 14,860 15,630 Gross profit 1,030 1,460 1,940 2,720 Administrative expenses 700 770 830 900 Income before taxes 330 690 1,110 1,820 Income taxes (50%) 165 345 555 910 Net income 165 345 555 910 Retained earnings-beginning 1,220 1,385 1,730 2,285 Retained earnings-ending $1,385 $1,730 $2,285 $3,195 Earnings per share $1.65 $3.45 $5.55 $9.10 1958 212 213 :1 1,230 17,189 (1,350) 17,069 1,711 1,000 711 356 355 3,195 $3,550 $3.55 SCHEDULE OF INVENTORY BALANCES USING AVERAGE-COST METHOD FOR THE YEARS ENDED MAY 31 2015 2016 2017 2018 2019 2020 $1,010 $1,120 $1,120 $1,270 $1,490 $1,710 Prepare comparative statements for the 5 years, assuming that Blue changed its method of inventory pricing to average-cost. Indicate the effects on net income and earnings per share for the years involved. Blue Instruments started business in 2015. Assume that the number of shares outsanding is 100. (Enter amounts that decrease cost of goods sold using either a negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000). Round all amounts except EPS to the nearest whole dollar, e.g. 5,275. Round Earnings Per Share to 2 decimal places, e.g. 1.62. Round up the tax effects to the next whole dollar.) BLUE INSTRUMENT COMPANY Statement of Income and Retained Earnings For the Years Ended May 31 2017 2018 2016 2019 2020 Sales-net Cost of goods sold Beginning inventory Purchases Ending inventory Total Gross profit Administrative expenses Income before taxes Income taxes Net income Retained earnings-beginning: As originally reported Adjustment As restated Retained earnings-ending Earnings per share