Pina Corporation began operations on January 1, 2014. During its first 3 years of operations, Pina reported net income and declared dividends as follows:
Net income Dividends declared
2014 $47,700 $-0-
2015 134,300 59,800
2016 161,700 53,500
The following information relates to 2017:
Income before income tax $248,700
Prior period adjustment: understatement of 2015 depreciation expense (before taxes) $31,800
Cumulative decrease in income from change in inventory methods (before taxes) $35,200
Dividends declared (of this amount, $31,800 will be paid on January 15, 2018) $113,300
Effective tax rate 40%
Required:
a. Prepare a 2017 retained earnings statement for Pina Corporation.