On July 9, 2021, Sheridan Enterprises Inc. discovered it had recorded the $70,000 purchase of land as legal expense on November 8, 2020. The company had reported retained earnings of $533,500 at its previous year end, December 31, 2020. During 2021, Sheridan had profit of $179,000 and it declared and paid cash dividends of $201,000. Sheridan has a 25% income tax rate.

Prepare the journal entry to correct the error. (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.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	select an account title to record correction of error on January 1 Retained EarningsLandIncome Tax PayableCashIncome Tax Expense	enter a debit amount	enter a credit amount
	select an account title to record correction of error on January 1 Retained EarningsCashIncome Tax PayableLandIncome Tax Expense	enter a debit amount	enter a credit amount
	select an account title to record correction of error on January 1 CashLandIncome Tax ExpenseIncome Tax PayableRetained Earnings	enter a debit amount	enter a credit amount
	(To record correction of error.)

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Assuming the company reports under ASPE, prepare a statement of retained earnings. (List items that increase retained earnings first.)

SHERIDAN ENTERPRISES INC. Statement of Retained Earnings choose the accounting period Year Ended December 31, 2021December 31, 2021Month Ended December 31, 2021
select an opening name Total ExpensesBalance, January 1 as AdjustedTotal RevenuesRetained Earnings, December 31RevenuesExpensesCorrection of Error in Recording Purchase of Land in 2020Balance, January 1 as Previously ReportedProfit / (Loss)Cash Dividends	$enter a dollar amount
select between addition and deduction AddLess: select an item Profit / (Loss)Retained Earnings, December 31Cash DividendsCorrection of Error in Recording Purchase of Land in 2020Balance, January 1 as AdjustedBalance, January 1 as Previously ReportedRevenuesTotal ExpensesExpensesTotal Revenues	enter a dollar amount
select a summarizing line for the first part Total ExpensesProfit / (Loss)Cash DividendsBalance, January 1 as AdjustedCorrection of Error in Recording Purchase of Land in 2020Retained Earnings, December 31ExpensesRevenuesTotal RevenuesBalance, January 1 as Previously Reported	enter a total amount for the first part
select between addition and deduction AddLess: select an item Total ExpensesRetained Earnings, December 31RevenuesProfit / (Loss)Total RevenuesExpensesCash DividendsCorrection of Error in Recording Purchase of Land in 2020Balance, January 1 as AdjustedBalance, January 1 as Previously Reported	enter a dollar amount
	enter a subtotal of the two previous amounts
select between addition and deduction AddLess: select an item Total RevenuesExpensesBalance, January 1 as AdjustedTotal ExpensesCorrection of Error in Recording Purchase of Land in 2020Cash DividendsRetained Earnings, December 31Balance, January 1 as Previously ReportedProfit / (Loss)Revenues	enter a dollar amount
select a closing name RevenuesTotal RevenuesBalance, January 1 as AdjustedBalance, January 1 as Previously ReportedCorrection of Error in Recording Purchase of Land in 2020Retained Earnings, December 31Cash DividendsExpensesProfit / (Loss)Total Expenses	$enter a total amount