Exercise 4-12 Sunland Corporation began operations on January 1, 2014. During its first 3 years of operations, Sun and reported net income and declared dividends as follows Net income Dividends declared 2014 $49,700 -0 2015 26,400 51,200 2016 54,800 161,500 The following information relates to 2017. $247,900 Income before income tax Prior period adjustment: understatement of 2015 depreciation expense (before taxes) 25,600 $37,000 Cumulative decrease in income from change in inventory methods (before taxes) Dividends declared (of this amount, $25,600 will be paid on January 15, 2018) $106,000 40 Effective tax rate