Please solve the following:

1. ABC Corporation has retained earnings of $675,000 at January 1, 2015. Net income during 2015 was $1,400,000, and cash dividends declared and paid during 2015 totaled $75,000. Prepare a retained earnings statement for the year ended December 31, 2015.
2. Using the information from ( above, prepare a retained earnings statement for the year ended December 31, 2015, but now assume the following error was discovered: a $80,000 error (net of tax) that caused 2014 inventory to be understated.