The comparative statements for Hessey Inc. follow:

The following additional information is provided:
1. In 2014, Hessey decided to change its depreciation method from sum-of-the-years'-digits to the straight-line method due to a change in pattern of usage. The assets were purchased at the beginning of 2013 for $90,000 with an estimated useful life of four years and no residual value. (The 2014 income statement contains depreciation expense of $27,000 on the assets purchased at the beginning of 2013.)
2. In 2014, the company discovered that the ending inventory for 2013 was overstated by $20,000; ending inventory for 2014 is correctly stated.
Hessey follows ASPE.
Instructions
(a) Prepare the revised statements of retained earnings for 2013 and 2014, assuming comparative statements (ignore income tax effects). Do not prepare notes to the financial statements.
(b) Identify other possible accounting treatments for the change in depreciation method under alternative circumstances.

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2014 $340,000 200,000 140,000 88,000 $52,000 2013 $270,000 142,000 128,000 50,000 $78,000 Sales Cost of sales Gross profit Net income 2014 $125,000 52,000 (30,000) $147,000 2013 $72,000 (25,000) $125,000 Retained earnings (Jan. 1) Net income 78,000 Retained earnings (Dec. 31)