Exercise 4-12 Sheffield Corporation began operations on January 1, 2014. During its first 3 years of operations, Sheffield reported net income and declared dividends as follows: Net income $40,500 130,100 164,000 Dividends declared 2014 2015 2016 53,600 54,000 The following information relates to 2017: Income before income tax Prior period adjustment: understatement of 2015 depreciation expense (before taxes) Cumulative decrease in income from change in inventory methods (before taxes) Dividends declared (of this amount, $31,800 will be paid on January 15, 2018) Effective tax rate $228,700 $31,800 $42,800 $107,600 40 % Your answer is partially correct. Try again. Prepare a 2017 retained earnings statement for Sheffield Corporation. (List items that increase adjusted retained earnings first.) SHEFFIELD CORPORATION Retained Earnings Statement For the Year Ended December 31, 2017 Prepare a 2017 retained earnings statement for Sheffield Corporation. (List items that increase adjusted retained earnings first.) SHEFFIELD CORPORATION Retained Earnings Statement For the Year Ended December 31, 2017 Retained Earnings, January 1, as Reported 227000 Correction for Depreciation Error Cumulative Decrease in Income from Change in Inventory Methods Retained Earnings, January 1, as Adjusted 182240 Add.Net Income/ (Loss) 137220 319460 Less Dividends Declared 107600 211860 Retained Earnings, December 31 Your answer is correct. Assume Sheffield Corporation restricted retained earnings in the amount of $71,530 on December 31, 2017. After this action, what would Sheffield report as total retained earnings in its December 31, 2017, balance sheet? Total retained earnings 211860