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Below is the retained Earnings account for the year 2020 for Waterway Corp. $261,300 Retained earnings, January 1, 2020 Add: Gain on sale of investments
Below is the retained Earnings account for the year 2020 for Waterway Corp. $261,300 Retained earnings, January 1, 2020 Add: Gain on sale of investments (net of tax) Net income Refund on litigation with government, related to the year 2017 (net of tax) Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) $44,900 88,200 25,300 29,100 187,500 448,800 38,700 63,700 Deduct: Loss on discontinued operations (net of tax) Write-off of goodwill (net of tax) Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) Cash dividends declared Retained earnings, December 31, 2020 26,900 35,700 165,000 $283,800 (a) Prepare a corrected retained earnings statement. Waterway Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2020 to compute net income. (List items that increase adjusted retained earnings first.)
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