The management of Novak Instrument Company had concluded, with the concurrence of its independent auditors, that results of operations would be more fairly presented if Novak 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. NOVAK INSTRUMENT COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED MAY 31 2016 2017 2018 2019 2020 Sales-net $14,040 $15,400 $16,760 8,110 $18,820 Cost of goods sold Beginning inventory 1,000 1,090 990 1,120 1,250 Purchases 13,070 13,840 14,960 15,960 17,634 Ending inventory (1,090) (990) (1,120) (1,250) (1,380) Total 12,980 13,940 14,830 15,830 17,504 Gross profit 1,060 1,460 1,930 2,280 1,316 Administrative expenses 690 760 840 900 1,000 Income before taxes 370 700 1,090 1,380 316 185 350 545 690 158 Income taxes (50%) Net income 185 350 545 690 158 1,220 1,405 1,755 2,300 2,990 Retained earnings-beginning Retained earnings-ending $1,405 $1,755 $2,300 $2,990 $3,148 Earnings per share $1.85 $3.50 $5.45 $6.90 $1.58 SCHEDULE OF INVENTORY BALANCES USING AVERAGE-COST METHOD FOR THE YEARS ENDED MAY 31 2015 2016 2017 2018 2019 2020 $1,010 $1,110 $1,090 $1,270 $1,510 $1,740 Prepare comparative statements for the 5 years, assuming that Novak changed its method of inventory pricing to average-cost. Indicate the effects on net income and earnings per share for the years involved. Novak 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.) NOVAK INSTRUMENT COMPANY Statement of Income and Retained Earnings For the Years Ended May 31 2016 2017 2018 Sales-net $ 14040 LA 15400 $ 16760 Cost of goods sold Beginning inventory 1010 1110 1090 Purchases 13070 13840 14960 Ending inventory -1110 -1090 - 1270 Total 12970 13860 14780 Gross profit 1070 1540 1980 Administrative expenses 690 760 840 Income before taxes 380 780 1140 Income taxes 190 390 570 Net income 190 390 570 Retained earnings-beginning: As originally reported 1220 1405 1755 Adjustment As restated Retained earnings-ending INO Earnings per share $ $