1. ( 20 pts.) Cotton Company has the following balance sheets and retained earnings statements prepared using FIFO: \begin{tabular}{|l|r|r|} \hline Capital Stock & $40,000 & $30,000 \\ \hline Retained Earnings & 43,000 & 33,000 \\ \hline & $83,000 & $63,000 \\ \hline \end{tabular} Retained Earnings Jan 1 Income Dividends Retained Earnin Dec 31 \begin{tabular}{|r|r|} \hline$33,000 & $35,000 \\ \hline 15,000 & 12,000 \\ \hline5,000 & 14,000 \\ \hline$43,000 & $33,000 \\ \hline \end{tabular} Cotton changed from FIFO to LIFO on January 1, 2022. December 31,2022 inventory at LIFO is $17,000 while December 31 , 2021 inventory at LIFO is $21,000. Inventory at January 1, 2021 was zero. a. Prepare the income and retained earnings statements in the format above assuming 2022 will be shown with camparative statements for 2021 . k
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