Bettner, Inc. operates a hardwood lumber export business. It began operations as a family business in 1997 and incorporated in 1999. On January 3, 2000, Bettner acquired Needham Bros. lumber and appropriately recorded $1 million of goodwill related to this transaction. Bettner’s accounting policy at the time was to amortize goodwill over a 10-year period. Unfortunately, Bettner’s CFO neglected to change this policy when the FASB issued SFAS No. 142, “Goodwill and Other Intangible Assets,” in 2001. Had Bettner implemented SFAS No. 142, goodwill would not have been amortized in 2002 and subsequent years; instead, Bettner would have conducted annual impairment tests to determine whether goodwill required a write-off. (These tests would have indicated that no impairment write-off was necessary.) Bettner’s failure to comply with SFAS No. 142 was not discovered until the company, considering a public stock offering, was audited for the first time in 2008. Bettner’s comparative financial statements (unaudited) follow:

Assume that goodwill is deductible for income tax purposes and that Bettner’s income tax rate is 35%.
Required:
1. Restate Bettner’s financial statements to bring them into compliance with SFAS No. 142.
2. Draft the disclosures required by SFAS No. 154 related to this restatement.

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Income Statements For Years Ending December 31, 2006 2007 2008 Sales $1,953,251 $2,126,251 $2,207,251 Cost of goods sold 1,230,548 1,339,538 1,390,568 Gross profit 722,703 786,713 816,683 Selling, general & administrative expenses 390,650 425,250 441,450 Goodwill amortization 100,000 100,000 100,000 Income before income taxes 232,053 261,463 275,233 Income tax expense 81,219 91,512 96,332 Net income 150,834 $ 169,951 $ 178,901