Exercise 4-12 (Part Level Submission)

Teal Corporation began operations on January 1, 2014. During its first 3 years of operations, Teal reported net income and declared dividends as follows:

		Net income			Dividends declared
2014		$45,600			$ 0
2015		134,600			55,900
2016		165,000			51,200

The following information relates to 2017:

Income before income tax		$221,600
Prior period adjustment: understatement of 2015 depreciation expense (before taxes)		$33,700
Cumulative decrease in income from change in inventory methods (before taxes)		$36,200
Dividends declared (of this amount, $33,700 will be paid on January 15, 2018)		$107,100
Effective tax rate		40	%

Prepare a 2017 retained earnings statement for Teal Corporation. (List items that increase adjusted retained earnings first.) TEAL CORPORATION Retained Earnings Statement