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In preparation for significant expansion of its International operations, ABC Co. has adopted a plan to gradualy shift to the same accounting methods as used by its international competitors. Part of this plan includes a switch from LIFO inventory accounting to FIFO (recall that IFRS does not allow LIFO). ABC decides to make the switch to FIFO at January 1, 2017. The following data pertains to ABCs 2017 financial statements (in millions of dollars). Sales Inventory purchases 12/31/17 inventory (using FIFO) Compensation expense $550 350 580 17 All sales and purchases were with cash. All of 2017s compensation expense was pald with cash. (ignore taxes.) ABC's property, plant, and equipment cost $400 millon and has an estimated useful life of 10 years with no salvage value. ABC Co. reported the following for fiscal 2016 (in millilons of dollars): ABC CO. BALANCE SHEET AT DECEMBER 31, 2016 2016 2015 200 480 400 2016 2015 Common stock 500 500 Cash Inventory Property, plant, and equipment400 Accumulated depreciation 365 Retained earnings 685 540 500 Total assets 1,185 $1,040 Total equity 1,185 1,040 ABC CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2016 2016 500 300' Cost of goods sold Depreciation expense Compensation expense Net income (15 145 Summary of Significant Accounting Policies Inventory: The company accounts for inventory by the LIFO method. The current cost of the company's inventory, which approximates FIFO, was $60 and $50 higher at the end of fiscal 2016 and 2015, respectively, than those reported in the balance sheet. Requirement 1: Accounting Prepare ABC's December 31, 2017, balance sheet and an income statement for the year ended December 31, 2017. In columns beside 2017's numbers, Include 2016's numbers as they would appear in the 2017 financial statements for comparative purposes

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