Exercise 22-9 Presented below are the comparative income and retained earnings statements for Metlock Inc. for the years 2017 and 2018 2018 2017 Sales Cost of sales Gross profit Expenses Net income Retained earnings (Jan. 1) Net income Dividends Retained earnings (Dec. 31) $373,000 193,000 180,000 94,600 $85,400 $111,700 85,400 (32,800) $164,300 $246,000 135,000 111,000 46,300 564,700 $72,000 64,700 (25,000) $111,700 The following additional information is provided: 1. In 2018, Metlock 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 2017 for $92,500 with an estimated 2. In 2018, the company discovered that the ending inventory for 2017 was overstated by $23,400; ending inventory for 2018 is correctly stated Prepare the revised retained earnings statement for 2017 and 2018, assuming comparative statements. (Ignore income taxes.) useful life of 4 years and no salvage value. (The 2018 income statement contains depreciation expense of $27,750 on the assets purchased at the beginning of 2017.) METLOCK INC. Retained Earnings Statement For the Year Ended 2018 2017