Linden Corporation started operations on January 1, 2012, and has used the FIFO cost formula since its inception. In 2021, it decides to switch to the weighted average cost formula. You are provided with the following information. 

Instructions 

Answer the following, ignoring income tax considerations. 

a. What is the beginning retained earnings balance at January 1, 2017, if Linden prepares comparative financial statements starting in 2017? 

b. What is the beginning retained earnings balance at January 1, 2020, if Linden prepares comparative financial statements starting in 2020? 

c. What is the beginning retained earnings balance at January 1, 2021, if Linden prepares single-period financial statements for 2021? 

d. What is the net income reported by Linden in the 2020 income statement if it prepares comparative financial statements starting in 2018?

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Net Income Retained Earnings (Ending Balance) Under FIFO Under Weighted Average Cost $ 92,000 Under FIFO 2015 $100,000 $100,000 2016 70,000 65,000 160,000 2017 90,000 85,000 235,000 2018 120,000 130,000 340,000 2019 300,000 293,000 590,000 2020 305,000 310,900 780,000