Problem 4-6 Below is the Retained Earnings account for the year 2017 for Shamrock Corp. Retained earnings, January 1, 2017 $258,100 Add: Gain on sale of investments (net of tax) $41,700 Net income 85,000 Refund on litigation with government, related to the year 2014 (net of tax) 22,100 Recognition of income earned in 2016, but omitted from income statement in that year (net of tax) 25,900 174,700 432,800 Deduct: Loss on discontinued operations (net of tax) 35,500 Write-off of goodwill (net of tax) 60,500 Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2017 (net of tax) 23,700 Cash dividends declared 32,500 152,200 Retained earnings, December 31, 2017 $280,600

(a) Prepare a corrected retained earnings statement. Shamrock Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2017 to compute net income. (List items that increase adjusted retained earnings first.)

SHAMROCK CORP. Retained Earnings Statement