Jacobsen Corporation is negotiating a loan for expansion purposes. Jacobsen's books and records have never been audited and the bank has requested that an audit be performed and that IFRS be followed. Jacobsen has prepared the following comparative financial statements for the years ended December 31, 2020 and 2019.

JACOBSEN CORPORATION Statement of Financial Position as at December 31, 2020 and 2019
		2020		2019
Assets
Current assets
	Cash		$163,000			$ 82,000
	Accounts receivable		392,000			296,000
	Allowance for doubtful accounts		(37,000	)		(18,000	)
	Fair value-net income investments		78,000			78,000
	Inventory		207,000			202,000
		Total current assets		803,000			640,000
Plant assets
	Property, plant, and equipment		167,000			169,500
	Accumulated depreciation		(121,600	)		(106,400	)
	Plant assets (net)		45,400			63,100
		Total assets		$848,400			$703,100
Liabilities and Shareholders' Equity
Liabilities
	Accounts payable		$121,400			$196,100
Shareholders' equity
	Common shares, no par value, 50,000 authorized, 20,000 issued and outstanding		260,000			260,000
	Retained earnings		467,000			247,000
		Total shareholders' equity		727,000			507,000
		Total liabilities and shareholders' equity		$848,400			$703,100
JACOBSEN CORPORATION Statement of Income for the Years Ended December 31, 2020 and 2019
		2020		2019
Sales		$1,000,000			$900,000
Cost of sales		430,000			395,000
Gross profit		570,000			505,000
Operating expenses		210,000			205,000
Administrative expenses		140,000			105,000
		350,000			310,000
Net income		$ 220,000			$195,000

During the audit, the following additional facts were determined:

1.

An analysis of collections and losses on accounts receivable during the past two years indicates a drop in anticipated bad debt losses. Management has decided that the loss experience rate on sales should be reduced from the recorded 2% to 1.5%, beginning with the year ended December 31, 2020.

2.

An analysis of the fair value-net income investments revealed that the total fair value for these investments as at the end of each year was as follows:

Dec. 31, 2019		$78,000
Dec. 31, 2020		$64,300

3.

Inventory at December 31, 2019, was overstated by $9,400 and inventory at December 31, 2020, was overstated by $14,800.

4.

On January 2, 2019, equipment costing $30,500 (estimated useful life of 10 years and residual value of $6,100) was incorrectly charged to operating expenses. Jacobsen records depreciation on the straight-line basis. In 2020, fully depreciated equipment (with no residual value) that originally cost $18,500 was sold as scrap for $3,300. Jacobsen credited the $3,300 in proceeds to the equipment account.

5.

An analysis of 2019 operating expenses revealed that Jacobsen charged to expense a four-year insurance premium of $5,400 on January 1, 2019.

6.

The analysis also revealed that operating expenses were incorrectly classified as part of administrative expenses in the amount of $15,000 in 2019 and $35,000 in 2020.

journal entries to correct the books at December 31, 2020. The books for 2020 have not been closed. Ignore income tax effects. (Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Beginning with reported net income, prepare a schedule showing the calculation of corrected net income for the years ended December 31, 2020 and 2019, assuming that any adjustments are to be reported on comparative statements for the two years. Ignore income tax effects. (Do not prepare financial statements.) (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any answer field blank. Enter 0 for amounts.)

A schedule showing the calculation of corrected retained earnings at January 1, 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any answer field blank. Enter 0 for amounts.)