*Exercise 14-9 On January 1, 2017, Blossom Incorporated had an unlimited number of common shares authorized, 220,000 issued, and the balance in the Common Shares account was $2.2 million. The company reported a balance in Retained Earnings on this date of $810,000 and accumulated other comprehensive income of $28,000. During the year, the following occurred: 1. Issued 80,000 common shares at $15 per share on July 1. 2. Declared a 3-for-2 stock split on September 30 when the fair value was $19 per share. 3. Declared a 5% stock dividend on December 9 to common shareholders of record at December 30, distributable on January 16, 2018. At the declaration date, the fair value of the common shares was $22 per share. 4. Earned profit of $420,000 for the year. 5. Recognized a loss on equity investments of $45,000 before tax, which will be reported as other comprehensive income. The company's income tax rate is 25%. Prepare a statement of changes in shareholders' equity for the year ended December 31, 2017. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) BLOSSOM CORPORATION Statement of Changes in Shareholders' Equity Common Shares Stock Dividend Distributable Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Balance, January 1 $ $ $ $ $ Issued for cash Stock split 3 for 2 Stock dividends Comprehensive income Balance, December 31 $ On January 1, 2017, Sunland Corporation had retained earnings of $650,000. During the year, Sunland had the following selected transactions: 1. Declared and paid cash dividends, $247,000. 2. Earned profit before income tax, $850,000. 3. Corrected a prior period error of $87,000, before income tax, which resulted in an understatement of profit in 2016. 4. Reacquired 29,000 common shares for $54,000 more than the original issue price. This was the first time the company had ever reacquired its own shares. 5. Completed a 3-for-1 stock split of the common shares. Sunland has a 30% income tax rate and reports under ASPE. Prepare a statement of retained earnings for the year ended December 31, 2017. (List items that increase retained earnings first.) SUNLAND CORPORATION Statement of Retained Earnings On July 9, 2017, Ivanhoe Enterprises Inc. discovered it had recorded the $68,000 purchase of land as legal expense on November 8, 2016. The company had reported retained earnings of $516,000 at its previous year end, December 31, 2016. During 2017, Ivanhoe had profit of $174,000 and it declared and paid cash dividends of $194,000. Ivanhoe has a 25% income tax rate. Prepare the journal entry to correct the error. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1 Assuming the company reports under ASPE, prepare a statement of retained earnings. (List items that increase retained earnings first.) IVANHOE ENTERPRISES INC. Statement of Retained Earnings