E22.9 (LO 2, 3) (Change in Estimate and Error; Financial Statements) Presented below are the comparative income and retained earnings statements for Denise Habbe Inc. for the years 2020 and 2021. 2021 2020 Sales $340,000 $270,000 Cost of sales 200,000 142,000 Gross profit 140,000 128,000 Expenses 88,000 50,000 Net income $ 52,000 $ 78,000 Retained earnings (Jan. 1) $125,000 $ 72,000 Net income 52,000 78,000 Dividends (30,000) (25,000) Retained earnings (Dec. 31) $147,000 $125,000 The following additional information is provided: 1. In 2021, Denise Habbe Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2020 for $100,000 with an estimated useful life of 4 years and no salvage value. (The 2021 income statement contains depreciation expense of $30,000 on the assets purchased at the beginning of 2020.) 2. In 2021, the company discovered that the ending inventory for 2020 was overstated by $24,000; ending inventory for 2021 is correctly stated. Instructions Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. (Ignore income taxes.)