Aquatic equipment corporation decided to switch from the lifo method of costing inventories to the fifo method at thebeginning of 2009. the inventory as reported at the end of 2008 using lifo would have been $60,000 higher using fifo. retained earnings had been reported at the end of 2008 as $780,000 (reflecting the lifo method). the tax rate is 40%.requlred: 1‘ calculate the balance in retained earnings at the time of the change (beginning of 2009) as it would have been reportedif fifo had been used in prior years.2 prepare the journal entry at the beginning of 2009 to record the change in principle.