Pacers Corporation prepares financial statements in accordance with ASPE. On January 1, 2020, the company had retained earnings of $420,000. In 2020, net income was $1,737,000, and cash dividends of $695,000 were declared and paid. Upon examination of the financial records, it was discovered that:

1. A pre-tax depreciation expense of $75,000 was omitted in 2019; and,
2. With the changes in the inventory method, there was a cumulative increase of $35,000 in prior years pre-tax income. This increase wasnt discovered prior to 2020.

Pacers marginal tax rate is 25%.

Instructions

With proper title and format, prepare a 2020 statement of retained earnings for Pacers Corporation.