Presented below are the comparative income and retained earnings statements for Sunland Inc. for the years 2025 and 2026. 2026 2025 Sales $374,000 $268,000 Cost of sales 213,000 128,000 Gross profit 161,000 140,000 Expenses 93,500 52,600 Net income $67,500 $87,400 Retained earnings (Jan. 1) $140,000 $75,500 Net income 67,500 87,400 Dividends (32,900) (22,900) Retained earnings (Dec. 31) $174,600 $140,000 The following additional information is provided: 1. 2. In 2026, Sunland 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 2025 for $97,000 with an estimated useful life of 4 years and no salvage value. (The 2026 income statement contains depreciation expense of $29,100 on the assets purchased at the beginning of 2025.) In 2026, the company discovered that the ending inventory for 2025 was overstated by $26,100; ending inventory for 2026 is correctly stated. 2025 Prepare the revised retained earnings statement for 2025 and 2026, assuming comparative statements. (Ignore income taxes.) SUNLAND INC. Retained Earnings Statement For the Year Ended > eTextbook and Media 2026 $ +A