Linden plc started operations on January 1, 2014, and has used the FIFO method of inventory valuation since its inception. In 2019, it decides to switch to the average-cost method. You are provided with the following information.

Instructions
a. What is the beginning retained earnings balance at January 1, 2016, if Linden prepares comparative financial statements starting in 2016?
b. What is the beginning retained earnings balance at January 1, 2019, if Linden prepares comparative financial statements starting in 2019?
c. What is the beginning retained earnings balance at January 1, 2020, if Linden prepares single-period financial statements for 2020?
d. What is the net income reported by Linden in the 2019 income statement if it prepares comparative financial statements starting with 2017?

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Net Income Under FIFO Under Average-Cost £ 92,000 Retained Earnings (ending balance) Under FIFO 2014 £100,000 £100,000 2015 70,000 65,000 160,000 235,000 2016 90,000 80,000 120,000 130,000 2017 340,000 2018 293,000 590,000 300,000 305,000 2019 310,000 780,000