Exercise 22-9 Presented below are the comparative income and retained earnings statements for Novak 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) $346,000 204,000 142,000 86,700 $55,300 $138,600 55,300 (28,200) $165,700 $273,000 136,000 137,000 50,700 $86,300 $75,800 86,300 (23,500) $138,600 The following additional information is provided: 1. In 2018, Novak 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 $99,000 with an estimated useful life of 4 years and no salvage value. (The 2018 income statement contains depreciation expense of $29,700 on the assets purchased at the beginning of 2017.) In 2018, the company discovered that the ending inventory for 2017 was overstated by $23, 200; ending inventory for 2018 is correctly stated. 2. Prepare the revised retained earnings statement for 2017 and 2018, assuming comparative statements. (Ignore income taxes.) NOVAK INC. Retained Earnings Statement For the Year Ended 2018 2017 Click if you would like to Show Work for this question: Open Show Work