Sandhill Company began operations on July 1, 2015, and has used the average-cost method of inventory...

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Sandhill Company began operations on July 1, 2015, and has used the average-cost method of inventory valuation since its inception. In 2019, it decides to switch to the FIFO method. You are provided with the following information: Retained Earnings Net Income (Ending Balance) Under Average-Cost Under FIFO Under Average Cost 2015 $55,000 $60,000 $53,000 2016 129,000 139,000 186,000 2017 172,000 197,000 320,000 2018 107,000 112,000 397,000 (a) What is the beginning retained earnings balance at January 1, 2016, if Sandhill prepares comparative financial statements starting in 2018? Retained earnings, January 1 $ (b) What is the beginning retained earnings balance at January 1, 2018, if Sandhill prepares comparative financial statements starting in 2018? Retained earnings, January 1 $ (c) What is the beginning retained earnings balance at January 1, 2019, if Sandhill prepares comparative financial statements starting in 2019? Retained earnings, January 1 $ (d) What is the net income reported by Sandhill in the 2018 income statement if it prepares comparative financial statements starting with 2016? Net Income $ Sandhill Company began operations on July 1, 2015, and has used the average-cost method of inventory valuation since its inception. In 2019, it decides to switch to the FIFO method. You are provided with the following information: Retained Earnings Net Income (Ending Balance) Under Average-Cost Under FIFO Under Average Cost 2015 $55,000 $60,000 $53,000 2016 129,000 139,000 186,000 2017 172,000 197,000 320,000 2018 107,000 112,000 397,000 (a) What is the beginning retained earnings balance at January 1, 2016, if Sandhill prepares comparative financial statements starting in 2018? Retained earnings, January 1 $ (b) What is the beginning retained earnings balance at January 1, 2018, if Sandhill prepares comparative financial statements starting in 2018? Retained earnings, January 1 $ (c) What is the beginning retained earnings balance at January 1, 2019, if Sandhill prepares comparative financial statements starting in 2019? Retained earnings, January 1 $ (d) What is the net income reported by Sandhill in the 2018 income statement if it prepares comparative financial statements starting with 2016? Net Income $

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To compare the effects of using the averagecost method versus the FIFO method on net income and reta... View the full answer