E4-12 (LO) Retained Earnings Statement Eddie Zambrano Corporation began operations on January 1, 2017. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows. 2017 2018 2019 Net Income Dividends Declared $ 40,000 $ 125,000 50,000 160,000 50,000 $ 240,000 $ 25,000 The following information relates to 2020. Income before income tax Prior period adjustment: understatement of 2018 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, 2021) Effective tax rate $ 35,000 $ 100,000 40% Instructions: (a) Prepare a 2020 retained earnings statement for Eddie Zambrano Corporation. Calculation of net income for 2020: (b) Assume Eddie Zambrano Corporation restricted retained earnings in the amount of $70,000 on December 31, 2020. After this action, what would Zambrano report as total retained earnings in its December 31, 2020, balance sheet? Retained earnings: Appropriated Unappropriated Total