Linden plc started operations on January 1, 2017, and has used the FIFO method of inventory valuation since its inception. In 2022, 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, 2019, if Linden presents 2- year comparative financial statements starting in 2019?

b. What is the beginning retained earnings balance at January 1, 2022, if Linden presents 2- year comparative financial statements starting in 2022?

c. What is the beginning retained earnings balance at January 1, 2023, if Linden presents 2- year single-period financial statements for 2023?

d. What is the net income reported by Linden in the 2022 income statement if it presents 2- year comparative financial statements starting with 2020?

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Net Income Retained Earnings (ending balance) Under FIFO Under Average-Cost Under FIFO 2017 £100,000 £ 92,000 £100,000 2018 70,000 65,000 160,000 2019 90,000 80,000 235,000 2020 120,000 130,000 340,000 2021 300,000 293,000 590,000 305,000 780,000 2022 310,000