Without Stores began operations on January 1, 2014, and adopted the FIFO method of accounting for its inventory for book and tax purposes. In 2017, it is considering a change to the average-cost method basis for book purposes only. Winthur provided the following information to assist in deciding whether to change inventory valuation techniques.

Winthur Stores reported the following income statement information:

Required

a. Prepare the income statements under both methods for the years ended December 31, 2014, through December 31, 2016.

b. Assume that Winthur Stores changes t o the average -cost method effective January I, 2017. Prepare the comparative income statements for the 3 years ended December 31, 2017.

c. Prepare the retained earnings column of the statement of stockholders' equity for the year ended December 31, 2017, assuming that Winthur does not present comparative statements. Winthur does not declare dividends in 2014-2017.

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Retained Eamings Ending Inventory Cost of Sales Average Avesage Average Cost Year Ended FIFO FIFO Cost Cost FIFO 12/31/2014 12/31/2015 12/31/2016 12/31/2017 $12 000 $10,000 $74,000 $ 76,000 $ 24,600 $23,400 19 500 16000 78,500 82,000 51,600 48,300 28 000 24,000 91,000 95,000 78,000 72,300 35 600 108,000 111,600 32,000 90,000 95,100 Account 2017 2016 2014 2015 Sales revenue $200,000 $175,000 $160,000 $145,000 Sell ng, general, and adm nstrat ve expenses Income tax rate $54,000 $40.000 $36,500 $30,000 40% 40% 40% 40%