FIND THE RIGHT NET INCOME AND THE RETAINED EARNINGS.

Presented below are the comparative income and retained earnings statements for Pearl Inc. for the years 2017 and 2018 2018 2017 $324,000 5295,000 Cost of sales 186,000 134,000 Gross profit 138,000 161,000 Expenses 91,700 49,700 Net income $56,300 $112,300 Retained earnings (an 1 $167,400 $79,900 Net income 56,300 112,300 Dividends (29,100 (23,800) Retained eamings (Dec. 31) $194,600 5167,400 The following additional information is provided: 1. In 2018, Pearl 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 $96,000 with an estimated useful life of 4 years and no salvage value. (The 2018 income statement contains deprecation expense of $28,800 on the assets purchased at the beginning of 2017) 2. In 2018, the company discovered that the ending inventory for 2017 was overstated by $24,400; ending inventory for 2019 is correctly stated. Prepare the revised retained earnings statement for 2017 and 2018, assuming comparative statements. (ignore income taxes.) Retained Earnings Statement For the Yar Endker 2018 2017 Retained Earnings, January 1, unadjusterd 167,40 LessCorrection of Error for Inventory Retalned Earnings, January 1, adjusted 143, 78 Add Net Income 87 Less Dividends 29,1 23 Retained Earnings, December 31 Click if you would like to Show Work for this question: pan Show Work