The Pyramid Company has used the LIFO method of accounting for inventory during its first two years of operation, 2019 and 2020. At the beginning of 2021, Pyramid decided to change to the average cost method for both tax and financial reporting purposes. The following table presents information concerning the change for 2019-2021. The income tax rate for all years is 25%. Income before Income Tax Using Average Cost Method 2019 2020 Total $ 91,800 Using LIFO Method $61,200 Income Difference 46,500 37,200 $138,300 $98,400 Difference $30,600 9,300 $39,900 Tax Effect after Tax 2021 $ 51,600 $46,300 $ 5,300 $7,650 2,325 $9,975 $1,325 $22,950 6,975 $29,925 $ 3,975 Pyramid issued 55,000 $1 par, common shares for $245,000 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 2020 and 2021. Required: 1. Prepare the journal entry at January 1, 2021, to record the change in accounting principle. 2. Prepare the 2021-2020 comparative income statements beginning with income before income taxes. 3. Prepare the 2021-2020 comparative statements of shareholders' equity. [Hint: The 2019 statements reported retained earnings of $45,900. This is $61,200 - ($61,200 25%)]. Required 1 Required 2 Required 3 Prepare the journal entry at January 1, 2021, to record the change in accounting principle. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Required 1 Required 2 Required 3 Prepare the 2021-2020 comparative income statements beginning with income before income taxes. (Round EPS answers to 2 decimal places.) COMPARATIVE INCOME STATEMENTS 2021 2020 Earnings per share Required 1 Required 2 Required 3 Prepare the 2021-2020 comparative statements of shareholders' equity. [Hint: The 2019 statements reported retained earnings of $45,900. This is $61,200 - ($61,200 x 25%).] (Deductions should be indicated by a minus sign.) PYRAMID COMPANY Statement of Shareholders' Equity For the Years Ended Dec. 31, 2021 and 2020 Balance at Jan. 1, 2020 Net income Cash dividends Balance at Dec. 31, 2020 Net income Cash dividends Balance at Dec. 31, 2021 Common Stock Additional Paid-in Capital Retained Earnings Total Shareholders' Equity