Armstrong Ltd has used the average cost (AC) method to determine inventory values since the company wasfirst formed in 2015. In 2019, the company decided to switch to the FIFO method, to conform to industry practice.The tax rate is 30%. The following data has been assembled:

2017 2018 2019

Net Income, as reported, after tax**352,400414,600195,400

Closing inventory AC 91,200148,200 n/a

Closing inventory FIFO 84,000136,800202,800

Dividends 11,400 15,60022,000

** Net income for 2017 and 2018 is using the old policy (AC) and net income 2019 is using the new policy (FIFO)

Opening retained earnings for 2018 as previously stated was 516,000.

REQUIRED:

a)Prepare the entry in 2019 to correct the error.

b)Prepare the comparative retained earnings section of the statement of changes in shareholders'equity for 2018 and 2019, reflecting the change.