E4-12 (L06) EXCEL (Retained Earnings Statement) Eddie Zambrano Corporation began operations on January 1, 2017.
During its first 3 years of operations, Zambrano reported net income and declared dividends as follows.
Net Income Dividends Declared 2014 $ 40,000 $ –0–
2015 125,000 50,000 2016 160,000 50,000 The following information relates to 2017.
Income before income tax $240,000 Prior period adjustment: understatement of 2015 depreciation expense (before taxes) $ 25,000 Cumulative decrease in income from change in inventory methods (before taxes) $ 35,000 Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2018) $100,000 Effective tax rate 40%
Instructions

(a) Prepare a 2017 retained earnings statement for Eddie Zambrano Corporation.

(b) Assume Eddie Zambrano Corporation restricted retained earnings in the amount of $70,000 on December 31, 2017.
After this action, what would Zambrano report as total retained earnings in its December 31, 2017, balance sheet?