Presented below are the comparative income statements for Denise Habbe Inc. for the years 2007 and 2008.

The following additional information is provided:
1. In 2008, Denise Habbe Inc. decided to switch its depreciation method from sum-of-the-years'-digits to the straight-line method. The assets were purchased at the beginning of 2007 for $100,000 with an estimated useful life of 4 years and no salvage value. (The 2008 income statement contains depreciation expense of $30,000 on the assets purchased at the beginning of 2007.)
2. In 2008, the company discovered that the ending inventory for 2007 was overstated by $24,000; ending inventory for 2008 is correctly stated.
Instructions
Prepare the revised retained earnings statement for 2007 and 2008, assuming comparative statements. (Ignore incometaxes.)

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2008 $340,000 200,000 140,000 88,000 $ 52,000 $125,000 52,000 (30,000) $147,000 2007 $270,000 142,000 128,000 50,000 $78,000 $72,000 78,000 25,000) $125.000 Sales Cost of sales Gross proft Expenses Net income Retained earnings (Jan. 1) Net income Dividends Retained earnings (Dec. 31)