E4.12 (LO 4, 5) January 1, 2019. During its first 3 years of operations, McEntire reported net income and declared dividends as follows. Dividends declared Net income 2019 $ 40,000 2020 125,000 2021 160,000 $ -0- 50,000 50,000 The following information relates to 2022. Income before income tax Prior period adjustment: understatement of 2020 depreciation expense (before taxes) Cumulative decrease in income from change in inventory methods (before taxes) Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2023) Effective tax rate $220,000 $ 25,000 $ 45,000 $100,000 20%