Problem 1 Summer stores began operations on January 1, 2012 and adopted the average cost method of accounting. In 2015, it is considering a change to the FIFO basis. Summer provided the following information to assist in deciding whether to change inventory valuation techniques. Ending inventory Cost of Sales Retained Earnings Year ended Average cost FIFO Average cost FIFO Average cost FIFO 31 Dec 2012 $ 10.000 $ 12.000 $ 76.000 $ 74.000$ 23.400 $ 24.600 31 Dec 2013 $ 16.000 $19.500 $ 82.000 $ 78.500 $ 48.300 $ 51.600 31 Dec 2014 $ 24.000 $ 28.000 $ 95.000 $91.000 $ 72.300 $ 78.000 31 Dec 2015 $ 32.000 $ 35.600 $ 108.000 $ 90.000 $ 95.100 $ 111.600 Summer stores reported the following income statement information: Account 2015 2014 2013 2012 Sales revenue $ 200.000,00 $ 175.000,00 $ 160.000,00 $ 145.000,00 Selling, general, and administrative $ 54.000,00 $ 40.000,00 $ 36.500,00 $ 30.000,00 expenses income tax rate 40% 40% 40% 40% Required: a. Prepare the income statements under both methods for the years ended December 31, 2012 through December 31, 2014. b. Assume that Summer stores changes to the FIFO basis effective January 1, 2015. Prepare the comparative income statements for the three years ended December 31, 2015. c. Prepare the retained earnings column of the statement of stockholders' equity for the year ended December 31, 2015 assuming that Summer does not present comparative statements. Summer does not declare dividends in 2012-2015