Armstrong Ltd$.$ has used the average cost $($AC$)$ method to determine inventory values since the company was first formed in $\backslash (20\backslash$times $3\backslash ).$ In $20$X$7,$ the company decided to switch to the FIFO method, to conform to industry practice. Armstrong will still use average cost for tax purposes. The tax rate is $\backslash (20\backslash \%\backslash ).$ The following data have been assembled:

$*$Using the old policy, average cost

$**$Using the new policy, FIFO.

Required:

Prepare the comparative retained earnings section of the statement of changes in shareholders' equity for $20$X$7,$ reflecting the change in accounting policy.