Concord Corporation began operations on January 1, 2017. Recently the corporation has had several unusual accounting problems related to the presentation of its income statement for financial reporting purposes. The company follows ASPE. You are the CPA for Concord and have been asked to examine the following data:

CONCORD CORPORATION Income Statement For the Year Ended December 31, 2020
	Sales revenue		$9,600,000
	Cost of goods sold		5,960,000
	Gross profit		3,640,000
	Selling and administrative expense		1,314,000
	Income before income tax		2,326,000
	Income tax expense (40%)		930,400
	Net income		$1,395,600

This additional information was also provided:

1.

The controller mentioned that the corporation has had difficulty collecting certain receivables. For this reason, the bad debt accrual was increased from 1% to 2% of sales revenue. The controller estimates that, if this rate had been used in past periods, an additional $82,200 worth of expense would have been charged. The bad debt expense for the current period was calculated using the new rate and is part of selling and administrative expense.

2.

There were 400,000 common shares outstanding at the end of 2020. No additional shares were purchased or sold in 2020.

3.

The following items were not included in the income statement:

	Inventory in the amount of $111,000 was obsolete.
	The company announced plans to dispose of a recognized segment. For 2020, the segment had a loss, net of tax, of $186,000.

4.

Retained earnings as at January 1, 2020, were $3 million. Cash dividends of $700,000 were paid in 2020.

5.

In January 2020, Concord changed its method of depreciating plant assets from the straight-line method to the declining-balance method to present more relevant information. The controller has prepared a schedule that shows what the depreciation expense would have been in previous periods if the declining-balance method had been used.

		Depreciation Expense under Straight-Line				Depreciation Expense under Declining-Balance				Difference
2017			$72,000				$144,000			$72,000
2018			72,000				108,000			36,000
2019			72,000				81,000			9,000
			$216,000				$333,000			$117,000

6.

In 2020, Concord discovered that in 2019 it had failed to record $30,000 as an expense for sales commissions. The sales commissions for 2019 were included in the 2020 expenses.

Prepare a combined statement of net income and retained earnings. (List items that increase retained earnings first once the opening balance is adjusted.)

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