McEntire Corporation began operations on January 1, 2012. During its first 3 years of operations, McEntire reported net income and declared dividends as follows.

The following information relates to 2015.
Income before income tax $220,000 Prior period adjustment: understatement of 2013 depreciation expense (before taxes) $ 25,000 Cumulative decrease in income from change in inventory methods (before taxes) $ 45,000 Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2016) $100,000 Effective tax rate 20%
Instructions

(a) Prepare a 2015 retained earnings statement for McEntire Corporation.

(b) Assume McEntire Corp. restricted retained earnings in the amount of $70,000 on December 31, 2015. After this action, what would McEntire report as total retained earnings in its December 31, 2015, statement of financial position?

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Net income Dividends declared 2012 $40,000 2013 125,000 2014 160,000 $ -0- 50,000 50,000