1) Calculation of ending retained earnings The records of Biloxi Corp. for calendar 2020 reflected the following correct pre-tax amounts: gain from discontinued operations, $50,000; cash dividends declared and paid $45,000; retained earnings, January 1, 2020, $275,000, correction of accounting error, $35,000 debit; income before income taxes and before discontinued operations, $165,000. The average income tax rate of 40% applies to all items except the dividends. Instructions Calculate the December 31, 2020 ending balance of retained carnings. 2) Statement of financial position presentation The following statement of financial position was prepared by the bookkeeper for Badger Corp. at December 31, 2020. Badger Corp. Statement of Financial Position December 31, 2020 $ 90,000 Accounts payable 52,200 Long-term liabilities 57.000 Shareholders equity 76,300 86,000 32.000 $393,500 Cash Accounts receivable (net) Inventories Investments Equipment (net) Patents $ 75,000 110,000 208,500 $393.500 The following additional information is provided: 1. 'Cash' includes prepaid insurance of 59,400; as well, a bank overdraft of $1,500 has been deducted. 2. The net accounts receivable balance includes: (a) accounts receivable-debit balances $62,000; (b) accounts receivable-credit balances $5,000; (c) allowance for doubtful accounts $4,800. 3. Inventories do not include goods costing $5,000 shipped out on consignment. Receivables of $5,000 were recorded on these goods. 4. Investments include investments in common shares, trading $24,000 and long-term $43,300, and franchises $9,000. 5. Equipment costing $8,000 with accumulated depreciation $6,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000. Instructions Prepare a statement of financial position in good form (shareholders' equity details can be omitted.)