a. Prepare statements in the format above assuming 2022 will be shown by itself without reference to 2021.

b. Journalize the change to LIFO at January 1, 2022.

7. 1. 25pts. Cotton Company has the following balance sheets and retained earnings statements: 2021 9 2022 10 Cash $10,000 $15,000 11 Receivables 15,000 10,000 12 Inventories (FIFO) 18,000 23,000 13 Other Assets 40.000 15.000 14 $83,000 'S63,000 15 16 Capital Stock $40,000 $30,000 17 Retained Earnings 42.000 3.000 18 $83,000 $63,000 19 20 21 Retained Earnings lan1 $33,000 $35,000 22 Income 15,000 12,000 23 Dividends -5.000 14.000 24 Retained Earnin Dec 31 $43,000 $33,000 25 26 The above incomes and Retained Carning balances are based on FIFO Cost of Goods Sold 22. Cotton changed from FIFO TO LIFO on January 1, 2022. December 31, 2022 inventory at LIFO IS 517,000 while December 31, 2021 inventory at UFO is $21.000 28 Inventory at January 1, 2021 wastero 7. 1. 25pts. Cotton Company has the following balance sheets and retained earnings statements: 2021 9 2022 10 Cash $10,000 $15,000 11 Receivables 15,000 10,000 12 Inventories (FIFO) 18,000 23,000 13 Other Assets 40.000 15.000 14 $83,000 'S63,000 15 16 Capital Stock $40,000 $30,000 17 Retained Earnings 42.000 3.000 18 $83,000 $63,000 19 20 21 Retained Earnings lan1 $33,000 $35,000 22 Income 15,000 12,000 23 Dividends -5.000 14.000 24 Retained Earnin Dec 31 $43,000 $33,000 25 26 The above incomes and Retained Carning balances are based on FIFO Cost of Goods Sold 22. Cotton changed from FIFO TO LIFO on January 1, 2022. December 31, 2022 inventory at LIFO IS 517,000 while December 31, 2021 inventory at UFO is $21.000 28 Inventory at January 1, 2021 wastero