Problem
Given the following information how do I find the correct adjusted retained earnings for 2014?
Gordon Company started operations on January 1, 2009, and has used the FIFO method of inventory valuation since its inception. In 2014, it decides to switch to the average cost method. You are provided with the following information.
|
Net Income
|
Retained Earnings
(Ending Balance)
|
|
Under FIFO
|
Under Average-Cost
|
Under FIFO
|
|
|
2009
|
$100,470
|
$91,310
|
$101,010
|
|
2010
|
69,580
|
64,330
|
159,170
|
|
2011
|
89,420
|
80,470
|
235,750
|
|
2012
|
120,640
|
130,790
|
339,570
|
|
2013
|
299,140
|
293,740
|
590,580
|
|
2014
|
305,190
|
310,250
|
779,030
|