In 2015, Compliance Industries changed its method of inventory valuation. The summary effect of those changes is as follows:

Net income was $128,000, $119,000, and $98,000 for 2015, 2014, and 2013, respectively. The income tax rate is 30%.
1. Compute the reported net income for each year if three years of financial statements are issued at the end of 2015.
2. Compute the amount of adjustment that would be made to Retained Earnings as of January 1, 2013.

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Actual 2015 Forecasted 2016 $2,000 5,000 Current assets. Accounts payable Total stockholders' equity $2,600 6,000 650 5,000 2,950 500 4,000 2,500