Checkered Rides Inc. has a March 31, 2021 fiscal year end and a 35% income tax rate. The following information is available for its 2021 year end:

1.Performed $880,000 service revenue and paid $325,000 in salaries. Interest expense was $12,600.2.Paid dividends in December 2020 of $14,000 that had been declared in November 2020.3.On March 10, 2021 declared dividends of $19,000 payable April 30, 2021.4.Recorded and remitted taxes of $140,000 (related to 2021 fiscal year) during the year.5.Issued common shares for $15,000 on January 31, 2021.6.Retained earnings balance on April 1, 2020 is $67,000.

Instructions

a)prepare an income statement and record the adjustment to income tax

b)Prepare a statement of retained earnings.